Looking back, looking forward

08 March 2006

Venkatachari Jagannathan looks back at the private non-life insurance industry's first five years, and its prospects for the future

It has been a momentous first half-decade of life for India's eight private non-life insurers. Not only have they had to contend with each other, but also take on the four government-owned giants. In addition they have had to manage relationships with the 23 third-party administrators that process health insurance claims, insurance brokers, corporate agents and banks that sell insurance policies.

Looking back,Insurance Regulatory and Development Authority (IRDA) chairman C S Rao says, "The non-life insurance industry has seen 180 per cent growth in these five years, writing a gross premium of Rs18,095.25 crore in 2004-05, up from Rs10,087.03 crore in 2000-01. The private players have come out with innovative products including weather index-based crop insurance policies, health insurance covers, liability products and others." (See: Get ready for next phase of reforms).

Cholamandalam MS General Insurance managing director Arun Agarwal adds, "Cashless benefits in health and motor insurance claims management, exclusive product lines for small and medium enterprises (SMEs) and extensive innovation in product design, especially in retail lines, are testimonials to the industry's customer-centric approach." Some insurers have also started issuing policies online.

Much of the industry's growth happened in the motor and health insurance segments. On the other hand the fire, miscellaneous and transit insurance portfolios of corporates migrated partially or even fully from government companies to private insurers.