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ICICI-Pru ahead in pvt insurance race

Freny Patel

It's been a year since private insurance companies launched operations in India. Who's top dog? ICICI Prudential Life Insurance Company. It mopped up Rs 1.22 billion in premium income.

Next come Max New York Life Insurance Company with a Rs 430 million premium income and HDFC Standard Life Insurance Company with a Rs 360 million premium income.

ICICI Prudential scored on all three fronts: selling the maximum number of policies (100,000), mopping up high premium income and registering a sum assured of Rs 27 billion.

Max New York Life stands in the number two position with Rs 430 million premium income received on 64,000 whole-life policies sold. It has a sum assured of Rs 21 billion.

HDFC Standard Life, which commenced operations at the same time as ICICI Prudential, ranks third, having sold 32,000 policies against 44,311 lives. It registered a sum assured of Rs 12.66 billion.

The new players have done relatively better than the new banks and telecom companies after the government threw open markets to private companies.

The top three private insurance companies managed to sell over 200,000 policies in a year. Their presence has not been limited to the metros and large towns but has also spread to rural India.

Though all companies have yet to report their figures, insurance industry sources estimate that private companies sold around 300,000 policies in the first year, despite their limited reach.

The largest branch network is that of HDFC Standard Life with operations in 26 cities, followed by ICICI Prudential in 16 cities, Om Kotak Mahindra in 13 cities and Max New York Life in 12.

"The first year for the new players has been a learning curve, with the focus on setting up capacity and base," said Om Kotak Mahindra managing director Shivaji Dam.

This is reflected in the distribution network, product range, greater use of information technology and customising the life cover to suit specific needs.

As ICICI Prudential chief marketing officer Saugato Gupta puts it: "We are offering a solution in terms of meeting the investment, protection and savings needs of customers. New players have been able to position insurance in the basket of financial products."

Has the Life Insurance Corporation of India learnt anything from the new players? Max New York Life CEO Tony Singh thinks so. Earlier, 95 per cent of the insurance market was investment related. Today, LIC has renewed its interest in whole-life policies like Jeevan Anand.

The new companies have introduced as many as 250 different covers with just eight basic plans and nine riders. LIC has lauded this and is introducing term cover as a rider.

Birla Sun Life Insurance, which has yet to reveal its figures, stated that it had a portfolio where the sum assured touched Rs 16 billion.

ING Vysya Life Insurance Company achieved 167 per cent in excess of its target in the number of policies sold since it commenced operations in October 2001. OM Kotak Mahindra Life Insurance received 13,000 proposals and mopped up Rs 130 million on the proposals received.

The sum assured meets its expectations at Rs 3.10 billion.

Allianz Bajaj Life Insurance sold 22,000 policies and mopped up Rs 110 million. SBI Life Insurance's performance in the first year reflects its need to rework the business model as the corporate agency route failed to come about. It sold 5,000 policies through its 1,000 agents and received a premium income of Rs 180-190 million.

Private insurance players are extracting a higher average premium.

ING Vysya Life's average premium is among the highest in the industry at Rs 12,500, versus LIC's Rs 5,500.

Max New York Life has the highest average sum assured in the range of Rs 300,000-400,000. This is as opposed to LIC's average of Rs 79,000. Higher averages imply that the business written was of a better quality.

The new companies are writing larger policies, reflecting the manner in which they are selling covers as a financial solution.

"Customers are taking stock of their financial position, as the new players have made individuals aware for the need to take higher life cover," said ICICI Prudential executive vice-president, sales and marketing, Kevin Wright.

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