General Insurance

Of 24 life insurers, only 19 post profits in FY16: IRDAI

The report further said the total net profit of non-life insurance industry dropped to Rs 3,238 crore as against Rs 4,639 crore in 2014-15

Of the 24 life insurance companies operating in India, only 19 insurers remained profitable in 2015-16 with the sector's overall profits dipping by 2.57 per cent.

During 2015-16, the life insurance industry reported profit after tax at Rs 7,414.97 crore as against Rs 7,611.31 crore for 2014-15, said the annual report by Insurance Regulatory and Development Authority of India (IRDAI).

The life insurers which reported profit are: AvivaLife, Bajaj Allianz, Birla SunLife, Canara HSBC, DHFL Pramerica, EXIDE Life, HDFC Standard, ICICI Prudential, IDBI Federal, India First, Kotak Mahindra, Max Life, PNB MetLife, Sahara India, SBI Life, Shriram Life, Star Union, Tata AIA and LIC of India.

The other five companies are: Aegon Life Insurance Company Ltd, Edelweiss Tokio Life Insurance, Bharti Axa Life Insurance, Future Generali India Life and Reliance Nippon.

State-owned Life Insurance Corporation (LIC) alone reported profit after tax at Rs 2,517.85 crore, an increase of 38.06 per cent over Rs 1,823.78 crore for 2014-15.

The report further said the total net profit of non-life insurance industry dropped to Rs 3,238 crore as against Rs 4,639 crore in 2014-15.

All the four public sector insurers reported net profit during the year 2015-16.

Quoting Swiss Re report, IRDAI said during 2015, the life insurance premium in India (inflation adjusted) increased by 7.8 per cent when global life insurance premium increased by 4 per cent.

The Indian non-life insurance sector witnessed a growth of 8.1 per cent (inflation adjusted) during 2015 whereas the growth in global non-life insurance premium was 3.6 per cent only.

Private General Insurer overtakes state-owned insurer

Private-sector non-life insurer ICICI Lombard has overtaken state-owned Oriental Insurance to become the fourth largest general insurer in India in terms of gross written premium. This is a milestone development because it is the first time after the industry opened up in 2000 that a private insurer has surpassed a government-owned rival.

ICICI Lombard achieved gross premium of INR2,880 crore (US$432 million) for the quarter ended June 2016. The figure represents an increase of 41% over the previous year and a market share of 11%. The private-sector insurer beat Oriental Insurance, whose premium income rose by 15% to INR2,508 crore in the same quarter, representing a market share of 9%, reported the Times of India.

As a whole, the April to June period, which was the first quarter of the current fiscal year, was good for non-life companies, which collectively grew by nearly 17%. Private insurers grew at about 21%, faster than the four state-owned general insurers which together saw growth of nearly 14%.

For one and half decades, the top four slots had been held by New India Assurance, which continues to be the market leader, and the three other public-sector units - National Insurance, Oriental Insurance and United India Insurance. The state-owned insurers have a combined market share of nearly 52%.

Among privately held general companies, the top five companies for the April-June quarter were ICICI Lombard, Bajaj Allianz (6% market share), IFFCO Tokio (4%), Tata AIG (3.4%) and Reliance General (3.2%). The five account for more than half of the total business of private insurers.

Regulator asks insurers to control management expenses

The insurance regulator has asked insurers to offer a better deal to customers by controlling management expenses and offering better returns on the premiums collected from them.

“The industry is paying too much towards management expenses and this needs to be rectified, as we deal with people’s money as custodians and are accountable to them,” said Mr T S Vijayan, Chairman of the Insurance Regulatory and Development Authority of India, who spoke at the 18th Global Conference of Actuaries in Mumbai on Monday.

He urged the industry to design simpler products and simplify the distribution process so that the benefit of insurance reaches the masses. “Actuaries need to respond to the challenges and design cost effective products and focus on customer needs,” he said.