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April 21, 2015
Subdued new premium growth due to poor auto sales and the lack of new projects have dented the general insurance industry’s business expansion in the financial year ended 31 March 2015 to a three-year low of 9.3% to INR847.15 billion (US$13.49 billion), according to provisional data from the General Insurance Council.
In comparison, the non-life industry had grown by 13% in FY2013/14 to INR775.4 billion, reported the Press Trust of India. The single-digit growth for the industry was due to a slump in auto business and the non-execution of infrastructure projects during the year, said General Insurance Council Secretary General, Mr R Chandrasekaran. The provisional figures compiled by the Council showed that the business of the four public-sector general insurers are likely to have grown by 10.1% to INR425.15 billion for FY2014/15. The four companies are: New India Assurance, National Insurance, Oriental Insurance Company and United India Insurance.
The 24 private-sector players had a combined premium collection of INR351.5 billion for the year, representing an increase of 9.9% over FY2013/14. The health insurance sector, dominated by half a dozen players, is likely to have grown by 30% to INR29.46 billion for FY2014/15. But if specialised areas like agriculture and Export Credit Guarantee Corporation were excluded, the non-life industry was likely to have grown by 10.6% for FY2014/15.
New India Assurance, the country’s biggest non-life insurer in terms of gross premiums, is hopeful of faster growth in the current financial year which started on 1 April. “The industry has bottomed out. I do see an annual growth in the range of 14-15% in the current fiscal year and the growth drivers are likely to be mandatory third-party motor premiums due to revised rates, and expected higher premiums in property and fire lines,” Mr G Srinivasan, the company’s Chairman and Managing Director, said.