Kolkata, March 16 The four public sector general insurers – United India Insurance Company, National Insurance Company, New India Assurance and Oriental Insurance Company – have been holding on to their combined market share so far this year.

As in February 2009, the four insurers collectively held a market share of 59.4 per cent, only marginally lower from the 60 per cent share held during the same period last year. The public sector had been losing market share to the private insurers consistently on a much larger scale earlier. In 2007-08, it had lost over 5 per cent market share compared with the previous year.

The total premium collected by the public sector during April-February stood at Rs 17,636 crore, growing at over 6 per cent compared with the previous year. All the 21 private sector general insurers together collected Rs 12,038 crore (16 per cent). The combined premium collected by all insurers stood at Rs 29,675 crore.

In 2007-08, the public and private sector insurers had registered a growth of 27.74 per cent and 4.17 per cent respectively in premium, compared with the previous fiscal.

Till February this fiscal, United India collected Rs 3,808 crore (13 per cent), Oriental Insurance collected Rs 3,579 crore (2.07 per cent), New India gathered Rs 4,982 crore (4.68 per cent) and National Insurance collected Rs 3,868 crore (6.2 per cent).

“A number of factors has helped the public sector insurers in arresting the diminishing market share this year,” Mr V. Ramasaamy, Chairman of the National Insurance Company, said.

The public sector insurer had engaged itself in a number of development activities such as business process reengineering while focusing on alternative channels such as bancassurance and agent motivating incentives, he pointed out.
Competitive market

The detariffing of interest rates by IRDA, which gave autonomy to insurers in pricing insurance policies, has created a competitive, level-playing field in general insurance business, a senior official of another public sector insurer said. The financial meltdown has also made the corporate sector shift partially towards the public sector insurers, perceived to be having higher financial strength, he added.

“The detariffing of premium has hit the private sector insurers comparatively more,” Mr Pranav Prasad, Head, Rural Business, ICICI Lombard, said.

While the regulation was put into effect from the beginning of 2007, the impact on premium collection was first felt during the current fiscal, he said. Retail segments such as motor and home insurances were impacted the most. Public sector insurance companies have, however, grown on account of addition in corporate clients during the period, he added.