Date : Dec-15-2008 10:51 Economic slowdown has resulted murkiness over insurance sector too as most of the life insurance players are expecting moderate growth in new business premium collection in the remaining fiscal. According to Max New York Life Insurance Senior Director and CFO Sunil Kakar, the growth in first premium income collection in the remaining five months would moderate on account of negative sentiment across the market.
According to Mr Kakar, most of the insurers receive about 60-70% of the total business in the second half of the year. As a result, the private sector is expected to wrap the year with a growth of somewhere around 20-25% against 40% in the first 7 months of 2008-09.
Presenting the same view SBI Life Insurance Managing Director and CEO has told, the first premium income till November has gone up by 100%. In the remaining months it is likely to moderate. The reason behind this moderate growth according to Kakar is sentiment which is affecting the insurance business. Most of the prospective clients are delaying their buying decision. However, he added that, the insurance is long-term investment and the current crisis would have no impact on the returns on assets. Explaining about the current market situation, th bearish mood of market is expected to be continue for 6-9 months more and it is temporary phase which would be fine in the coming year.
ADAG group Reliance Life Insurance also expects the same growth in new business premium to be around 100% as compared to 200% registered last fiscal. Further, the new business premium of the company has grown over 200% at Rs 2,751 crore (USD 625 million) for the fiscal ended March. Besides, all the private companies'' growth percentages so far are ahead of the estimates for the full year. Nevertheless, in order to meet the current estimates for FY09, private insurance players would have to book residual new premiums (over the period November 2008 to March 2009) which are about 105-150% of new premiums booked year-to-date October 2008. About 40 of annual insurance sales occur in last quarter (January-March) of every year and first half of the year accounts for less than about 40% of annual sales for Indian insurance industry.
According to Mr Kakar, most of the insurers receive about 60-70% of the total business in the second half of the year. As a result, the private sector is expected to wrap the year with a growth of somewhere around 20-25% against 40% in the first 7 months of 2008-09.
Presenting the same view SBI Life Insurance Managing Director and CEO has told, the first premium income till November has gone up by 100%. In the remaining months it is likely to moderate. The reason behind this moderate growth according to Kakar is sentiment which is affecting the insurance business. Most of the prospective clients are delaying their buying decision. However, he added that, the insurance is long-term investment and the current crisis would have no impact on the returns on assets. Explaining about the current market situation, th bearish mood of market is expected to be continue for 6-9 months more and it is temporary phase which would be fine in the coming year.
ADAG group Reliance Life Insurance also expects the same growth in new business premium to be around 100% as compared to 200% registered last fiscal. Further, the new business premium of the company has grown over 200% at Rs 2,751 crore (USD 625 million) for the fiscal ended March. Besides, all the private companies'' growth percentages so far are ahead of the estimates for the full year. Nevertheless, in order to meet the current estimates for FY09, private insurance players would have to book residual new premiums (over the period November 2008 to March 2009) which are about 105-150% of new premiums booked year-to-date October 2008. About 40 of annual insurance sales occur in last quarter (January-March) of every year and first half of the year accounts for less than about 40% of annual sales for Indian insurance industry.
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