Page 14 - Insurance Times June 2019

PSUs rule among biggest Rating cut of RCap Cos: Insurers run for cover
The ratings downgrade of select instruments of two Reliance Capital group com-
insurers in equity mar-
panies is threatening to spill over into the insurance
kets sector with some insurers seeking regulatory forbear-
Three out of the top five inclusive of ance on complying with investment norms.
Life Insurance
People close to the development said some insurance
Corporation
companies, facing a breach in investment norms under
(LIC) of India
unit-linked plans and group and annuity funds, have
i n su ra n c e
asked Insurance Regulatory and Development Authority of India (IRDAI) for extra
players in the
time to comply with the rules. They have told the regulator that they need more
stock market
than the stipulated three days to comply with a rule which says that not more
are public sector ones, as revealed by
than 5 per cent of their funds would be invested in companies with ratings of
an analysis of the data on insurance
A+ and below. In ULIP funds, a minimum 75 per cent of funds have to be in-
funds' activity in the equity segment.
vested in papers rated AAA and up to 25 per cent in AA+ papers. The sub-limit
The New India Assurance Company
in the overall fund cannot be more than 5 per cent in A+ and below rated pa-
and General Insurance Corporation of
pers.
India (GIC Rs) occupy the third and
fourth positions, show figures from "Due to the ratings downgrade there was a passive breach in one of our ULIP
PRIME Database (nseinfobase.com). funds," an insurance company executive said on condition of anonymity.
ICICI Prudential Life Insurance and
HDFC Life are the only two private sec-
Private life insurers' share rises, premium mobilization
tor ones on the list.
up 22.2%
However, the key player is LIC, at Rs.
6.21 trillion in equities. The other The life insurance industry's premium collection at Rs 214,672 crore has re-
two public sector players account for corded a growth of 10.73 per cent in 2018-19,
another Rs. 31,628 crore. The two largely driven by individual non-single premium and
private players (ICICI Prudential and group single premium as the private sector garner-
HDFC Life) account for Rs. 41,165 ing more market share.
crore in equity assets as far as the
However, the number of policies sold by the 24 play-
December-end shareholding data is
ers including the lone state-owned player, Life Insur-
concerned.
ance Corporation (LIC), has almost remained flat at 2.86 crore with a growth
Those holding are required to be of 1.73 per cent. LIC, with a market share of 66.74 per cent, has further lost its
mandatorily disclosed on the stock market share to the 23 private market players in 2018-19. In 2017-18, it had a
exchange. The total assets are based market share of 69 per cent.
on the sum of all such disclosed
The number of policies sold by LIC at 2.14 crore has stagnated, recording a
stakes. A similar trend has been dis-
growth of 0.46 per cent during 2018-19. According to figures compiled by IRDAI,
closed by the data disclosed so far
23 private players have mobilized a total premium of Rs 72,461 crore, register-
for March. As per the observation of
ing a growth of 22.20 per cent. However, in terms of policies at 72.54 lakh, these
the experts, the private players may
players have just recorded a growth of 5.74 per cent.
dominate in the near future.
With a market share of almost 7 per cent, the listed HDFC Life has emerged as
Pranav Haldea, managing director
the largest private sector players and second largest life insurance player in the
(MD), PRIME Database Group, said
country. The life insurance venture between HDFC and UK-based Standard Life
the market share of private players
has also been the highest grosser of new premium among the private sector
has been rising over the past several
players at Rs 14,971 crore, up 32 per cent while total premium rose 24 per cent
years. "Over the past two decades,
to Rs 29,186 crore.
since they were granted licenses, the
private sector insurance companies SBI Life, with a total new premium Rs 13,792 crore, up 26 per cent and with a
have performed extremely well to market share of 6.42 per cent has consolidated its position as the second larg-
gain market share from the incum- est private sector player in the country. ICICI Prudential Life, with a market share
bent. This trend is likely to con- of 4.78 per cent and with a new premium of Rs 10,251, up 12.43 per cent, has
tinue," he added. remained as the third largest private sector player in the industry.
14 The Insurance Times, June 2019