Life insurance still struggling, non-life continues to grow

November 1, 2012

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The lean half of the financial year for insurance sales is behind us and the numbers for the life insurance vertical are not impressive. But the general insurance or non-life vertical has shown a healthy growth rate. Highlights are given below.

— New business premium collection overall dipped by 4 percent in the first half of the year

— LIC continues to garner 75 percent of new business premium collected. Their premium collection dropped by 4 percent though, when compared to the first half of last year.

— Private sector insurance companies saw an overall de-growth of 6 percent compared to the same period last year.

— Among private companies, eight players bucked the negative trend and showed growth in new business insurance premium collection – Bajaj Allianz, ING Vysya, HDFC Life, ICICI Prudential, Metlife, Shriram, Edelweiss Tokio and DLF Pramerica being growth drivers.

— ICICI Prudential is the largest private player by collecting 20.3 billion rupees as premium.

— The industry grew by a healthy 19 percent in the first half of the year.

— While private sector companies grew by 21 percent, the public sector companies rose by 17.5 percent.

— Even individually, all but one of the insurance companies have shown a growth in premium collection.

— Collectively, the six public sector units have 58 percent of the market.

— New India is the largest public sector enterprise and ICICI Lombard is the largest private-sector player based on premium collection

The general insurance industry seems to be on the right track and premium collection should be on the rise even for the remainder of the second half. There is a lot of demand for pricing to risk and doing away with the practice of garnering market share at the cost of the bottom line. Also, companies are playing the better-features-and-benefits game and charging higher premiums. Customers seem to be willing to pay for better service and features — at least a trend seems to be visible.

With the rush to save taxes, the second half of the year is when the life insurance business starts picking up. There were quite a few regulatory changes and hence, the business alignment which had to be done by insurance companies over the last year and more. There are some more suggested changes which may be implemented in the coming months.

If the firms can adjust quickly, we might see the business picking up. The cost and time required to retrain the entire sales force on changes is substantial and it is but natural that the strain would be felt in terms of business numbers. The silver lining is that most of the changes have been pro-consumer and are good for the industry in the long run.

The next six months will be crucial and interesting for the life insurance industry — an increase in FDI, regulatory changes and the need to grow business.

For more articles by Deepak Yohannan, please visit

One comment

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Thanks for this information! I have had insurance calgary for years and wonder if it is vastly different than insurance in the US. Thanks again!

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