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.
Sunday, May 27, 2007
IRDA sets conditions for ULIP policy holders
Mumbai: The Insurance Regulatory Development Authority (IRDA) has said that while policyholders in the unit linked insurance plans (ULIPs) can remain invested in the policy for a short period after maturity they cannot withdraw any amount or engage in fund management activities.
Hence, the policy holder will not have the option of switching funds, either to equity or debt or withdraw the amount. The decision to continue with the scheme after maturity will purely be the option of the policyholder.
While the permission has been granted for a short period of a week to a fortnight after the maturity of the scheme, no independent fund management activity will be allowed since the product does not give any insurance cover.
Officials stated that the option would enable policyholders, who are not satisfied with the net asset value (NAV) during maturity, to hold on for a better NAV.
Earlier, policyholders could remain with the scheme for five years after maturity and were entitled to partial withdrawal of funds, which have been plugged by the new clarification.
Hence, the policy holder will not have the option of switching funds, either to equity or debt or withdraw the amount. The decision to continue with the scheme after maturity will purely be the option of the policyholder.
While the permission has been granted for a short period of a week to a fortnight after the maturity of the scheme, no independent fund management activity will be allowed since the product does not give any insurance cover.
Officials stated that the option would enable policyholders, who are not satisfied with the net asset value (NAV) during maturity, to hold on for a better NAV.
Earlier, policyholders could remain with the scheme for five years after maturity and were entitled to partial withdrawal of funds, which have been plugged by the new clarification.
GoM not to list PSU non-life insurance companies
Mumbai: The government which is considering making draft amendments to insurance acts is not in favour of allowing the four public sector non-life insurance firms to list on the bourses mainly as the four public sector general insurance companies have over Rs1,000 crore of reserves each, officials said.
The draft amendments, prepared by the finance ministry, had proposed to amend the General Insurance Business Nationalisation Act to allow the four general insurers to raise equity capital from the market.
The finance ministry was considering to allow listing of the general insurance companies so that they have access to capital to meet solvency margins and also fund business expansion, including overseas.
The officials said that for FY07, National Insurance, which was earlier making losses, has shown improvement and the insurers have adequate reserves for expanding overseas operations.
Further there was also a move to bring down the minimum capital requirement for health insurance companies to Rs50 crore from Rs100 crore. The paid up capital of the public sector insurers in 2005-06 is Rs5 crore. Of the four PSUs, National Insurance reported a net loss of Rs106.25 crore in 2005-06, while Oriental reported lower net profits at Rs283.92 crore, New India and United have reported higher profits at Rs716.38 crore and Rs425.23 crore respectively.
As per IRDA norms, insurers have to maintain a required solvency margin (excess of the value of assets over the liabilities) of 1.5 times.
The draft amendments, prepared by the finance ministry, had proposed to amend the General Insurance Business Nationalisation Act to allow the four general insurers to raise equity capital from the market.
The finance ministry was considering to allow listing of the general insurance companies so that they have access to capital to meet solvency margins and also fund business expansion, including overseas.
The officials said that for FY07, National Insurance, which was earlier making losses, has shown improvement and the insurers have adequate reserves for expanding overseas operations.
Further there was also a move to bring down the minimum capital requirement for health insurance companies to Rs50 crore from Rs100 crore. The paid up capital of the public sector insurers in 2005-06 is Rs5 crore. Of the four PSUs, National Insurance reported a net loss of Rs106.25 crore in 2005-06, while Oriental reported lower net profits at Rs283.92 crore, New India and United have reported higher profits at Rs716.38 crore and Rs425.23 crore respectively.
As per IRDA norms, insurers have to maintain a required solvency margin (excess of the value of assets over the liabilities) of 1.5 times.
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