Many in
India believe that the insurance sector is a secure sector but the collapse in
the premium income of private and public life coverage plans and general
insurance companies clears this myth. The statistics came out in the light,
concerning the premium income of the insurance industry noticeably represents
that Insurance India is not recession proof.
Demise initiated from the life insurance
segment of India where the chief and mainly trusted companies have not recorded
enormously inspiring premium income. To begin with Life Insurance Corporation
of India (LIC) has recorded the expansion
rate of 4.45 percent in 2009 collecting total Rs.1.56 trillion as its premium
income. The downfall is also seen in the 2009 first quarter as the private life
insurance competitor like ICICI Prudential Life has revealed the demise of 49
percent in its expansion, in June quarter. In the meantime SBI Life, the life
insurance PSU has also reported the premium income of Rs.1, 072.72 Cr in the
same quarter besides the 2008 year’s same quarter premium income of Rs.1,
148.64 Cr.
The insurance sector of India is not only
witnessing this downfall in life insurance segment but is also looking south
with its general insurance biz. The data represent the deliberate pessimistic
expansion of the general insurance sector in India with both public and private
firms like LIC – Life insurance corporation of India giving out combined outcomes. In the first
quarter of the 2008-2009 financial year, where the public segment general
insurance firms, like United India, Oriental Insurance and New India Assurance
have reported the expansion of 14 percent, 7 percent and 10 percent
correspondingly, one more PSU National Insurance has reported in the
pessimistic expansion of 2 percent.
Speaking of private general insurance firms a
number of giant competitors like Tata AIG General Insurance and Reliance
General Insurance have reported the pessimistic expansion. The additional
competitors in the similar group like ICICI Lombard Insurance and Bajaj Allianz
General have recorded the southward expansion of 13% and 21% correspondingly in
the June quarter. Though there are a number of private firms present which have
reported the superior expansion rate against all predictions, this comprises
Royal Sundaram, which has developed by 10 percent, whereas Cholamandalam has
recorded the positive expansion of 17 percent. Amusingly, HDFC General
insurance products provider division, HDFC Ergo has also reported an expansion
of 246 percent in its premium segment.
The instability of the insurance segment in
India can be calculated in the expansion figures of past five years where the
motor insurance business is developed by 16 percent while the health insurance
industry has recorded the expansion of 37 percent in the similar period.
The negative expansion of Bajaj Allianz General
and ICICI Lombard Insurance against HDFC General Insurance and Cholamandalam is
seen, by experts, as the outcome of meager reach in the cities whereas the poor
show of life insurance is observed as the outcome of shortage of skilled
insurance consultants.
Author: Gaurav Khurana is an expert on
Insurance. He is the Founder Director of DIALABANK.COM (Call 60011600) and Ex
National Sales Head – ING Investment Mgt India and Vice President Citibank N.A
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