New India, Reliance General lead insurance sector in FY07

Chennai: The government owned New India Assurance Company Limited became the first domestic non-life insurer to cross the Rs5,000 crore gross premium income mark. Though it closed FY07 with a premium income of Rs5,024.15 crore against Rs4,791.51 crore in the previous year, yet it logged the lowest growth rate amongst government insurers with just at 4.86 per cent growth.
Out of the four government companies only United India and Oriental Insurance Company Limited (premium income Rs3,940.53 crore) logged double-digit growth last year. National Insurance Company Limited ended the year with a gross premium income of Rs3810.88 crore, representing 8.15-per cent growth.
On the other hand private sector Reliance General Insurance Company Ltd registered a stupendous growth rate of 461.96 per cent — the highest amongst the 12 non-life insurers — and earned a premium income of Rs912.23 crore. In the process it catapulted itself to the seventh rank last fiscal from twelfth in the previous year with a premium of Rs162.33 crore.
The other high growth company last year was the Chennai-based Cholamandalam MS General Insurance Company Limited that earned Rs314.59 crore and registered a growth rate of 41.57 per cent.
Bcking the growth trend was another private sector insurer, Chubb General Insurance Company Limited, which logged a negative growth of 7.59 per cent, earning Rs190.16 crore, down from Rs205.77 crore in FY06.
Apart from these, the rankings amongst the 12 non-life insurers last fiscal remained unchanged. The much expected event — ICICI Lombard General Insurance Company Limited dislodging United India Insurance Company Limited from the fourth spot did not happen. United India closed the year with a gross premium of Rs3,509.95 crore leaving behind ICICI Lombard with Rs3,003.45 crore.
For quite some time during the year that went by, the difference in the premium income between the two was around Rs300 crore, fuelling expectations of private sector ICICI Lombard overtaking government owned United India.
What is interesting is that ICICI Lombard has widened the topline difference between itself and the Pune-based Bajaj Allianz General Insurance Company Limited by Rs1,198.85 crore as against Rs307.43 crore at the end of FY06. Last fiscal Bajaj Allianz closed its books with a premium of Rs1,804.60 crore.
On its part Bajaj Allianz General was the only insurer to have an underwriting profit (premium income minus claims paid) for three consecutive years and also the first private insurer to cross the Rs100-crore in profit before tax, generating Rs117 crore. Its after-tax profit stood at Rs76 crore up from Rs52 crore in 2005-06.
It also continued with its policy of transparency by declaring its detailed financials on the net.
According to Bajaj Allianz General, CEO Kamesh Goyal, "The year 2006-07 was significant for the industry as we witnessed a transition from a regulated to a de-tariffed regime. Our focus has and will continue to be maintaining the right balance between growth and profitability."
At the macro level the domestic non-life industry crossed a landmark figure of Rs25,000- crore premium during the year under review. The industry registered a premium of Rs25,002.45 crore as against Rs20,431.82 crore the previous year. The share of government companies in this is Rs16,285.51 crore as against the private player's share of Rs8,716.94 crore.
Meanwhile the two specialised insurers – Export Credit Guarantee Corporation of India (ECGC) and Star Health & Allied Insurance- have also turned out good performance. The former earned Rs618.05 crore and the later Rs22.42 crore.