Private sector peers outsmart LIC in Q1

Private players are growing big in insurance. The first quarter of the current fiscal has seen them notch up over 31 per cent and 22.6 per cent shares in the life and non-life space, respectively.

The overall life premium garnered by insurance companies declined by close to 9 per cent to Rs 12,512 crore in the period from the corresponding quarter of the previous year.

The decline in the life premiums was largely due to a 20 per cent drop in collections from life behemoth Life Insurance Corporation (LIC). Private players saw a 33 per cent rise in life premiums in the period. On the other hand, there was a 12 per cent increase in the overall general insurance premium in the first quarter of the current year.

These figures are based on approximate statistics of the Insurance Regulatory and Development Authority (IRDA) collated by DNA Money over the first quarter of the year.

Insurance industry analysts say the first quarter has thrown up some interesting trends in the sector. Compared to the first three months of the current year, single-premium plans raked in the moolah for all companies in the first three months of 2006-07.

The comparative drop in premiums this year is mainly attributed to the modifications on unit linked plans which came through last July and companies went overboard in selling policies before the changes. Unit linked policies constituted a major portion of the individual single premium plans in the first three months of 2006-07. Premiums from single premium plans in the first quarter this year constituted 25 per cent of the overall portfolio against 53.2 per cent last year.

Individual non-single premiums comprised of 61 per cent of the total premium in the first three months in 2006-07 compared to 36 per cent last year. In the midst of the overall premium change in the first quarter, LIC's share dropped to 68.6 per cent till June 30, as against 78.5 per cent in the corresponding three- months of 2006-07.

Source: DNA Money