The Hindu Business Line : Private life insurers losses rise 80% in 2006-07

Chennai, April 8 Losses of private sector insurance companies were up by nearly 80 per cent in 2006-07. According to figures provided by the Insurance Regulatory and Development Authority (IRDA) in its annual report, the total losses of 15 private life insurers rose to Rs 1,934 crore in 2006-07 compared with Rs 1,084 crore in the previous year.

Only two private insurers – SBI Life and Shriram Life posted profits of Rs 4 crore and Rs 10 crore respectively. The biggest losses were posted by ICICI Prudential at Rs 649 crore compared to Rs 188 crore earlier and Reliance Life at Rs 315 crore compared to Rs 98 crore earlier.

LIC comfortable

The public sector major Life Insurance Corporation (LIC) was comparatively in a much more comfortable situation, reporting a 22 per cent growth in profits at Rs 774 crore.

The average break-even period for life insurance companies was said to be 8 years when the sector was opened up to private sector entry at the turn of this millennium. That period may now be a little more away. A few private players have been able to reduce their losses this year or prevent it from getting worse. The life insurance market grew by 47 per cent last year.

Good performance

Public sector general insurance companies produced a record performance in 2006-07. Profits for the four state-owned companies put together were up by 120 per cent to a level of Rs 2,907 crore in 2006-07.

According to figures provided by the Insurance Regulatory and Development Authority (IRDA) in its annual report, the total profits of the other 8 private general insurers rose by 49 per cent to Rs 230 crore.

Toppers in pvt sector

The public sector major New India Assurance Company dominated the profit sweepstakes, garnering nearly half the industry’s profits in 2006-07 as well as 2005-06. Bajaj Allianz General with Rs 75 crore and ICICI Lombard with Rs 68 crore were among the toppers in the private sector.

The general insurance market grew at about 22 per cent to reach a level just under Rs 25,000 crore in premium in 2006-07. The public sector companies had a market share of 65 per cent while the eight private companies had a market share of 35 per cent.

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