This effectively means that the four state owned companies may have to lose business at a faster rate than they have experienced in recent times.
A growth of 20 per cent within three years of opening up would be one of the fastest growth rates that the private non-life industry would achive in comparsion with other countries where the insurance market has been opened up recently.
Currently, the private sector consisting of 8 companies has a share of 9.32 per cent, up almost 250 per cent since 2001-02.
Observers attribute the faster success rate of the private sector to their aggressiveness and flexible aproach.
Also in a unique trend, some of the private sector companies like ICICI Lonmard, Bajaj Allianz, IFFCO-Tokio and Reliance General with their limited operations have already booked moderate profits in the second year of operations.
Normally, a general insurance company takes five to seven year to break even.
Some of the new factors which will acclerate the growth of the private sector general insurance sector are; full scale operations of two more companies, HDFC Chubb General Insurance and Cholamandalam General Insurance which started operations at the fag end of 2002-03 and the expansion of Reliance General Insurance during the current year.
Reliance General Insurance has remained low key since its inception and is planning to flex its muscles during the year. The company which belongs to Indias largest private sector group Reliance Industries (RIL) is targetting October for take off.
Meanwhile, RIL has floated its own insurance broking firm to provide synergy to its non-life company as well as channelising the placement of insurance covers of its own assets worth over Rs 65,000 crore.
Besides other companies like Bajaj Allianz, Tata AIG, IFFCO Tokio, ICICI Lombard after tasting success are now pretty focussed and are going all out to make a kill to further the boost in performance in terms of premiums and profits.
Though grabbing corporate business from their existing state owned insurer will be the main strategy, foraying into a personal line of products with a low margin and high volume business will be another key plan.
Sources point out that the four public sector companies, which have offlate been mired in employee unrest, are yet to wake up to the realities, particularly in terms of marketing.
The April business figure shows that out of the four state owned companies three including the largest company, New India Assurance, have experienced a negative growth.