Although public sector companies hold 62% share in the non-life insurance market, private sector companies are growing faster. The latest numbers released by the Insurance Regulatory and Development Authority (IRDA) for July reveal that the while the private sector business in the segment jumped by 25%, public sector business grew only by 8%.
Industry experts say the private sector’s performance is due to aggressive selling. In addition, private companies have a smaller premium collection base compared with their public sector counterparts. Take, for instance, United India Insurance Co. Ltd, the smallest player in the public sector group, which collected Rs285.27 crore in July, while HDFC General Insurance Co. Ltd, the smallest entity in the private sector group, collected just Rs18.9 crore. Reliance General Insurance Co. Ltd registered the maximum growth of 148%, with total premium collection of Rs124 crore.IFFCO-Tokio General Insurance’s premium collection, however, went down by 30% in the same month.
For the life insurance industry, back-of-the-envelope calculations reveal that the average premium per policy has fallen 22% in case of regular premium products for individuals, and 24% in case of individual, single premium products over the past one year. Experts say investors are allocating a small amount of their take-home to buy insurance products given their rising equated monthly instalment (EMI) payments for home mortgage loans. In addition, bank fixed deposits, which bear an annual interest rate of around 9% currently, look a far more attractive investment to the average man on the street.