The first half of the current fiscal saw Private non-life insurers slowing the health insurance growth while having a robust growth in another segment, motor insurance.

Health insurance accounts for a fifth of the total non-life insurance business in the country. The segment grew 10.45 per cent mainly as the state owned general insurance firms outperformed the private sector firms, during April-September 2009.

Insurance Regulatory and Development Authority (IRDA) released figures, which show Rs 3,431.50 crore was collected as new business premium for health covers by general insurers during April-September compared to Rs
3,106 crore collected during the same period last financial year.

State firms, National Insurance, New India Assurance, United India and Oriental Insurance Company together collected Rs 2,308 crore recording a 22 per cent increase in the first half of 2009-10 while private sector firms on the hand recorded a drop of 7 per cent during the same period. Rs 1,123.23 crore was the added total collection for thirteen private sector firms for the same period after Rs 1,216 crore collected during April-September 2008.

Four major private firms, Reliance General, Tata AIG General, Iffco Tokio and ICICI Lombard mainly caused the dip, while Reliance general recording a drop of 40 per cent at Rs 124 crore from Rs 208 crore collected in the same period a year ago. The other three, ICICI Lombard, Tata AIG and Iffco Tokio too saw drops of 27 per cent, 21 per cent and 13 per cent, respectively.

IRDA annual report showed that incurred claims ratio for general insurers was lower 88.84 per cent during 2008-09 from 92.31 per cent in the previous year. The ratio is the proportion of claims to the premium underwritten. Claims on the health segment improved marginally from 107 per cent to 106 per cent.

The motor segment however saw better performance from the private firms with a 12 per cent growth to Rs 3,314 crore during the first half of the year compared with Rs 2,950 crore collected during April-September 2008. The four public sector firms on the other hand registered a low 2.6 per cent growth at Rs 3,603 crore during April-September 2009 from Rs 3,510 crore during same period last year.

As the claim ratio is registered below 100, many think of entering the motor segment. However, the overall claims ratio for the industry deteriorated from 84.88 per cent in 2007-09 to 86.30 per cent in 2008-09. A part of the reason for the increase was the fire and marine portfolios where the marine claims ratio rose from 86.68 per cent in 2007-08 to 102.90 per cent in 2008-09 mostly due to high discounts offered and the risks in the segment.

The underwriting losses of the general insurance companies rose to Rs 5,326.11 crore from Rs 3,899.49 crore in the previous year while all public insurers observed a slowdown in growth rate of losses and private non-life insurers continued to witness high growth in underwriting losses reaching 83.54 per cent.

Four public sector firms saw a drop of 81 per cent to Rs 426.81 crore as against Rs 2,205.48 crore in Net profits. Oriental Insurance and National Insurance both incurred loss of Rs 52.66 crore and Rs 149.21 against their last years profit of Rs 9.30 crore and Rs 163.43 crore last year. Reliance, HDFC Ergo, Future Generali, Universal Sompo, Shriram and Bharti AXA all recorded losses for the year.

Together the health and motor segments account for the 60 per cent of the total non-life insurance business in the country.