Individual agents and brokers drive non-life premium growth

Tags: Insurance

Insurers see sizable growth of 21% in the first half of FY13

A sharp rise in premium collection by individual agents and brokers led to a sizable growth of 20.8 per cent in private sector non-life insurers’ premium collection to Rs 14,125 crore in the first half of financial year 2012-13, compared with Rs 11,691 crore in same period last year. An FC Research Bureau analysis of four large private non-life insurers shows a 49.3 per cent rise in premium collection by individual agents. The collection stood at Rs 1,885 crore in the April–September period, compared with Rs 1,262 crore in same period last year, registering a hike of Rs 623 crore.

As a proportion of total premium collection, individual agents managed 26.6 per cent in the April–September period, compared with 21.3 per cent in the corresponding period last year.

The insurers that were considered for the analysis are ICICI Lombard General Insurance, HDFC Ergo General Insurance, Bajaj Allianz General Insurance and Reliance General Insurance.

Premium collection by brokers has also risen by 44.7 per cent, or Rs 511 crore. They collected Rs 1,656 crore in the April–September period, compared with Rs 1,144 crore in the corresponding period last year. As a proportion of total premium collection, brokers grew to 23.4 per cent in the April–September period, compared with 19.3 per cent in the corresponding period last year.

Direct selling through branches and internet, which contributes highest to the premium collections, has, however, witnessed a decline of 4 per cent. The premium collections stood at Rs 2,473 crore in the April–September period, compared with Rs 2,574 crore in the corresponding period last year, drop of Rs 101 crore. As a proportion of total premium collection, direct selling declined to 34.9 per cent in the April–September period, compared with 43.4 per cent in the corresponding period last year.

“As and when industry matures, new distribution models emerge, but in the initial stage, insurers depend primarily on direct selling,” said Sanjay Datta, head of underwriting and claims at ICICI Lombard General Insurance.

Corporate agents contributed 15.1 per cent of the total premium collection in the April–September period, compared with 16.0 per cent in the corresponding period last year, and grew by 12 per cent to Rs 1,067 crore in the April–September period, compared with 948 crore in same period last year.

Reliance General Insurance witnessed the highest rise in premium collection by individual agents. Collections rose by 90 per cent, or Rs 276 crore, to Rs 583 crore during the April–September period, compared with Rs 307 crore in corresponding period last year.

Premium collection of Bajaj Allianz General Insurance through brokers rose the highest. Collections rose by 84 per cent, or Rs 222 crore, to Rs 486 crore during the April–September period, compared with Rs 264 crore in same period last year.

Reliance General Insurance witnessed the steepest fall in premium collection through branches and internet. Collections declined by 53 per cent, or Rs 227 crore, to Rs 201 crore during the April–September period, compared with Rs 427 crore in corresponding period last year.

Premium collection of HDFC Ergo General Insurance through direct channel saw the highest rise. Collections rose by 87 per cent, or Rs 162 crore, to Rs 347 crore during the April–September period, compared with Rs 185 crore in same period last year.

sagarsen@mydigitalfc.com

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