Motor cover drives 26% growth in insurance premium

Written by fe Bureau | Mumbai | Updated: Oct 29 2011, 09:21am hrs
Spurred by a hike in the mandatory third-party motor insurance premium and higher health insurance sales, the domestic general insurance sector has recorded a 26% jump in its total premium in the first half of 2011-12.

The general insurance industry comprises 24 players, including four state-owned companies. The premium growth of the general insurance industry had been subdued ever since the decontrolling of prices for all portfolios, except third-party motor insurance, was effected four years ago. The industry is now riding high on two portfolios motor and health.

The total health insurance premium has gone up 21.47% y-o-y to R6,730 in the first half of 2011-12. Moreover, the total motor insurance premium has risen 32% y-o-y in the first half of 2011-12 to R10,872.51 crore .

The third-party motor premium has gone up 48% y-o-y in the first half of 2011-12 to R4,451.05 crore. The Irda had recently allowed a premium hike in the range of 10-70% in the third-party motor portfolio. The motor premium in the own-damage category, which is an optional cover for vehicle owners, has contributed 23% to the higher premium.

The four state-owned companies New India Assurance, United India Insurance, National Insurance and Oriental Insurance have recorded a 25% y-o-y growth in the first half ended September 2011, at R16,915.82 crore. The 20 private sector companies crore witnessed a 27% y-o-y growth in the same period, at R11,686 crore .

The largest state-owned company, New India Assurance, and the largest private sector company, ICICI Lombard General Insurance, have lost some market share.

While New India's market share has fallen from 15.98% to 15.25%, ICICI Lombard's market share has shrunk from 9.35% to 8.32%. However, public sector companies together have been able maintain their market share at almost 60% in the first half 2011-12.