Mumbai: Subdued new premium growth due to poor auto sales and lack of new projects have dented the general insurance industry's business expansion in FY 2015 to a three-year low of 9.3 per cent at Rs 84,715 crore, according to provisional data.
The industry had grown by 13 per cent in FY 2014 to Rs 77,540 crore, according to the General Insurance Council data.
"Single-digit growth for the industry was due to slump in auto and non-execution of infra projects during the year gone-by," General Insurance Council Secretary General R Chandrasekaran said.
As per the provisional figures compiled by the council, four public sector general insurers are likely to have grown to Rs 42,515 crore in FY 2015, which is a 10.1 per cent growth over the previous fiscal.
Twenty four private sector players continued to lag behind the public sector ones with a cumulative premium collection of Rs 35,150 crore, which is just 9.9 per cent growth over FY 2014.
Chandrasekaran said lower topline growth would have had its impact on the bottom line too as the year was marked by two major natural calamities--the Hudhud cyclone that hit the Andhra cost earlier in the year and killer floods in the Kashmir Valley.
The health insurance sector, dominated by half a dozen players, however, is likely to have grown at 30 per cent to Rs 2,946 crore in FY 2015.
But if one excludes the specialised areas like agriculture and Export Credit Guarantee Corporation, the industry is likely to have grown by 10.6 per cent for the fiscal.
In March alone, the industry grew by 13.7 per cent on an annual basis," said Chandrasekaran.
New India Assurance, however feels that the bad days are behind and is hopeful of the new fiscal saying the industry has bottomed out in FY 2015, "The industry has bottomed out. I do see an annual growth in the range of 14-15 per cent in the current fiscal and the growth drivers are likely to be mandatory third-party motor premium due to their revised rates and the expected higher premium in property and fire lines," New India Assurance Chairman and Managing Director G Srinivasan said.
Leading private player ICICI Lombard too attributed the poor numbers to the general weakness in the economy, saying the economy didn't grow well last fiscal, so the industry growth was less than 10 per cent.
"Our company has seen a slack growth. Sectors like motor which contributes 40 per cent of our business and engineering didn't do well during the year. There was also not much improvement in the loss ratio in the year," ICICI Lombard General Insurance head for underwritings and claims Sanjay Datta said.
He lso said the two catastrophes-the Hudhud cyclone and the killer J&K floods also have affected our bottomlines.
Some general insurers, however have grown more than industry's average.For instance, Reliance General Chief Executive Rakesh Jain said his company has grown by 13 per cent during the last fiscal.
"We are expecting a growth of 15-18 percent for the industry during the current fiscal," he added.
SBI General also echoed similar views saying it has grown by over 33 per cent.
"Our business has grown by 33 per cent during the year gone-by. Segments like fire, personal accident, motor and health were the growth drivers for our growth during the year," SBI General Managing Director and Chief Executive Bhaskar J Sarma said.
And the company is more ambitious about the new year, eyeing close to 50 per cent growth.
"We are targeting 40-50 percent growth in business for the current fiscal and we are focusing on areas like rural, SMEs, retail, corporates, health and personal accident to achieve this growth.
We have 75 branches and will be opening around 30 more branches this fiscal," he added.
Similar is the case with Tata AIG General, which grew by 15 per cent.
"We have grown by 15 per cent which was more than the market growth during the year gone by," Tata AIG General Insurance Chief Executive K K Mishra said and blamed the poor show by the auto sector as the main culprit coupled with absence of new projects.
