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Growth of Non Life Insurance Sector

The non-life industry has posted robust 28% growth in the first half of this fiscal year, aided by a huge jump in
health premiums. The growth augurs well for general insurance companies whose profitability came under
pressure soon after the insurance regulator freed prices on all lines of business in January 2007. The easing of
price controls triggered a rate war that led to a sharp dip in premiums in segments like property insurance. The
pricing environment has improved now. This is good news for insurers as it will help these companies reduce
their losses.
Companies are offering customised products and also bundling insurance products. The premium collected by
non-life companies in India is only a fifth of the amount garnered by life companies.Higher disposable incomes
will help push up the sales of non-life products such as motor, health, property or fire insurance to
individuals. The creation of more assets will also increase sales of general insurance covers. Robust economic
growth is, therefore, the key to improving penetration in the non-life business. Data collated by insurers shows
that the total premium collected by non-life companies stood at Rs 23,704 crore against Rs 18,496 crore in the
same period in 2010. Health insurance is a major driver, with a 40% rise in the health premium during the period
under review.
Clearly, with rising health costs, there is growing awareness among consumers. However, pricing is a cause for
concern with hospitals overcharging patients covered by health insurance and seldom accepting rates proposed
by insurers. Costs can be lowered if hospitals offer discounts to insurers based on volumes. A pragmatic solution
is for hospitals to adopt low-cost models and a regulatory body to enforce fair competition among hospitals.
This will be in the interest of both consumers and insurers.

Origin of Non Life Insurance


Though Lloyds Insurance pioneered general insurance way back in 1688, the
first non-life insurance company to set up shop in India was the Triton Insurance
Company of Calcutta. In 1907, the first Indian general insurer, the Indian
Mercantile Insurance Company started its operations. The New India Assurance
Company Ltd. was incorporated in 1919. In 1972, the non-life insurance business
in the country was nationalized and the GIC (General Insurance Corporation of
India) was formed as a holding company with four subsidiaries: The National
Insurance, Oriental Insurance, United India Insurance and the New India
Assurance Company Ltd. Since then, insurance in India had a protective wall built
around it, to keep it a local players market. The above companies controlled the
insurance industry for nearly 30 years or so.
Current Insurance Market Structure
General Insurance business in India was under complete control of four
Government insurance companies for nearly three decade. After much
deliberation finally the market was opened for competition from December 2000
and also Government has de-linked four Public sector companies from holding
company GIC to operate as independent company. In addition to four Public
Sector insurance companies the Insurance Regulatory and Development
Authority (IRDA) has issued licenses to the eight Private General Insurance
Companies.
List of non-life insurance companies operating in the market as on date.
Name Head Office Shareholding
Bajaj Allianz General Insurance Co. Ltd. Pune Privately Held
Cholamandalam MS General Insurance Co. Ltd. Chennai Privately Held

HDFC Chubb General Insurance Co. Ltd. Mumbai Privately Held


ICICI Lombard General Insurance Co. Ltd. Mumbai Privately Held
IFFCO-Tokio General Insurance Co. Ltd. New Delhi Privately Held
National Insurance Co. Ltd. Kolkata Public Sector
New India Assurance Co. Ltd. Mumbai Public Sector
Oriental Insurance Co. Ltd. New Delhi Public Sector
Reliance General Insurance Co. Ltd Mumbai Privately Held
Royal Sundaram Alliance General Insurance Co. Ltd. Chennai Privately Held
Tata AIG General Insurance Co. Ltd. Mumbai Privately Held
United India Insurance Co. Ltd. Chennai Public Sector