ICICI Pru pips SBI Life to become largest private insurer

ICICI Prudential collected Rs303 crore as first-year premium in the first month of the current fiscal while SBI Life earned a first-year premium worth Rs185 crore

ICICI Prudential has pipped SBI Life to regain the top position among private insurance players, garnering new business worth Rs303 crore as first-year premium in April this year, reports PTI.

ICICI Prudential collected Rs303 crore as first-year premium in the first month of the current fiscal, compared to Rs135 crore in the corresponding month last year, according to monthly data released by the Insurance Regulatory and Development Authority (IRDA).

On the other hand, SBI Life, promoted by the country's largest lender, State Bank of India SBI), earned a first-year premium worth Rs185 crore compared to Rs460 crore a year ago.

In 2009-10, SBI Life emerged as the biggest player. The insurer collected Rs7,041 crore as first-year premium, while ICICI Prudential managed to mop up a Rs6,334 crore premium in the last fiscal.

Overall, in April this year, the life insurance industry registered a growth of 60% in new business compared to the corresponding month last year.

The 23 life insurers collectively mopped up a first-year premium of Rs5,746 crore in April against Rs3,601 crore in the same month of the previous year.

The growth is significant, as there is turf war between market regulator Securities and Exchange Board of India (SEBI) and insurance watchdog IRDA over regulation of Unit Linked Insurance Plan (ULIP) products, which account for more than half of the total business of life insurance companies.

The difference between SEBI and IRDA arose when the former banned 14 life insurers from raising money from ULIPs in April, following which the latter asked the companies to ignore the order.

Subsequently, the finance ministry intervened and the two regulators agreed to jointly seek a legally binding mandate from the court as to who has jurisdiction over ULIPs.

Till then, status quo ante was restored by the finance ministry.

After the agreement, SEBI amended its order and banned only new ULIPs launched after 9th April, when the first order of SEBI was issued.

In April this year, the largest insurer Life Insurance Corporation of India’s (LIC) first year premium stood at Rs4,173 crore, compared to Rs2,113 crore in the corresponding month last year, translating into a growth of around 100%.

The market share of LIC has also increased to over 72% during the month, compared to around 58% in the same period of the previous year.

In the first month of the current fiscal, the 22 private insurers together could mop up first-year premium of just Rs1,572 crore, compared to Rs1,488 crore in the year-ago, period, translating into a growth of over 5%.

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COMMENTS

V.Nallasamy

7 years ago

I agree Mr Dilip Kumar Swain's statement. Even sizeable quantity comes from partial withdrawal and surrender and starting a new proposal. Customers ignorance are encashed in those cases. IRDA should have a vigil on that.

Dillip kumar swain

7 years ago

SBI LIFE/ICICI PRU LFE, JO BI HO,TOTAL SALES PRESSURE OR BUSINESS COME FROM BANK R.M/B.M..s SELLING,DUE TO FOREIGN TRIP.I REQUEST TO SEBI PL. MAKE A VIGILANCE QUERY. CEO / CHAIRMAN PRESURRING B.M.s TO SELL L.I. IT IS A SELF EGO PROBLEM. AGAR DUM HAI BRING NEW TRADITIONAL PLANS & SELL THE PRODUCT.BUT I KNOW NOBODY IS ITERESTED TO CHECK MISS SELLING.

Toll collection will jump five-fold to Rs10k crore by 2014: Kamal Nath

The Centre has constituted a committee under the Unique Identification Authority of India (UIDAI) chairman Nandan Nilekani to work out an electronic toll collection system for plugging leakages in the system

The government today said that toll collection on national highways will jump five-fold to Rs10,000 crore in next four years, but leakage is still a concern, for which new policy measures will be put in place, reports PTI.

Toll collection is a key instrument for the government to attract private investment, road transport and highways minister Kamal Nath told PTI.

"We have constituted a committee under Unique Identification Authority of India (UIDAI) chairman Nandan Nilekani to work out an electronic toll collection system for plugging leakages that could be as high as 20%," he said.

The committee is likely to give its report by next month.

"Our estimated toll collection will be close to Rs10,000 crore per year by the fifth year of United Progressive Alliance (UPA)-II," he said, adding this was based on bringing an estimated 35,000 km of roads under the Operate, Maintain and Toll (OMT) system for private investors, he added.

"We are looking at overhauling the toll policy. We are in the process of formulating a policy... a new policy as to how to collect the toll by the OMT process," Mr Nath said.

The OMT aims at bringing the Indian toll collection system at par with the international tolling standards, he said.

He dismissed suggestions that putting the vast network of highways under the toll system could be a burden on the common man. "There is a maintenance cost that is paid from the toll... good roads would help save a huge quantity of petrol and diesel... on the contrary, it would help people," he said.

Mr Nath, however, was concerned over the tendency of avoiding the toll, saying that leakage for this or other reasons was a matter of concern. "At present, the leakage in some areas is as high as 20%," he said.

The National Highways Authority of India (NHAI) could only collect about Rs3,500 crore in the last two financial years from 8,500 km of toll highways.

"NHAI collected Rs1,936 crore as toll in 2009-10, while the collection in the previous fiscal stood at Rs1,600 crore," a senior road ministry official said.

India has over 70,000 km of highways and proposes to significantly enhance the network by constructing 20 km of roads every day in the next five years.

At present, the process of crossing toll plazas is time-consuming, as one is required to pay several times to complete a journey on a highway stretch. Besides, different collection systems, including manual systems, lead to revenue leakage.

The Planning Commission and prime minister-headed Committee on Infrastructure have been expressing concern over toll leakages estimated at over Rs1,500 crore.
 

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Daily Market View : A slow climb

The market has started a laboured rise subject to dips

The market made a splendid recovery today, rising from the three-month closing low witnessed on Tuesday. The strong opening by its Asian counterparts and a clutch of good corporate news kept the momentum in the positive terrain in the early session. Added to this, the positive opening in European benchmarks supported the gauges in the post-noon session, enabling them to close slightly off the day’s high. The Sensex ended the session at 16,387.84, up 365.36 points (2.28%) while the Nifty settled at 4913.05, up 106.30 points (2.21%).

Markets in Asia rebounded after a slide yesterday, as investors chose to brush aside the worries about the debt crisis in Europe and focus on economic recovery. Gains in commodity prices also supported the upmove.

Asian markets, barring the KLSE Composite, settled in the green. The Shanghai Composite rose 0.12%; the Hang Seng added 1.11%; the Jakarta Composite surged 7.27%; the Nikkei 225 advanced 0.66%; the Straits Times soared 1.71%; the Seoul Composite jumped 1.36% and the Taiwan Weighted increased 1.14%.

On the other hand, the KLSE Composite declined by 0.10%.

US markets closed marginally in the red on Tuesday despite good news from the economy. The Conference Board, based in New York, said that its Consumer Confidence Index rose to 63.3, up from a revised 57.7 reading in April, showing a rise for the third straight month. The other component of the index, which measures how shoppers feel about the economy, rose to 30.2 from 28.2.

The Dow closed lower by 22.82 points (0.23%) to 10,043.75. The Nasdaq lost 2.60 points (0.12%) to 2,210.95 and the S&P 500 closed marginally higher by 0.38 points (0.04%) at 1,074.03.

Back home, the government today decided to speed up the process for appointment of merchant bankers for its Rs40,000 crore disinvestment plan.

Appointment of market intermediaries will be taken up simultaneously with the clearance for disinvestment of stake in a public sector undertaking (PSU).

“The appointment of merchant bankers and other intermediaries will now be taken up simultaneously with the process of seeking the Cabinet Committee on Economic Affairs (CCEA) approval as soon as the minister in charge has approved the case,” the CCEA said in a statement after a meeting.

The top gainers on the Sensex included Hindalco Industries (up 7.30%), TCS (up 5.36%), Tata Motors (up 5.28%), Jaiprakash Associates (up 5.17%) and ICICI Bank (up 4.72%).

The laggards on the benchmark were Grasim Industries (down 20.52%), Reliance Communications (down 2.56%), ACC (down 1.34%), BHEL (down 0.36%) and Maruti Suzuki (down 0.23%).

All sectoral indices on the BSE settled in the positive terrain today. Information technology was up 3.48%, realty was up 3.01%, metal was up 2.98%, technology was up 2.48% and auto surged 2.02%.

Banks may soon face a liquidity crunch as demand for funds is increasing on account of the telecom operators’ huge outgo towards the payment for third generation (3G) spectrum. The government is set to get revenue of over Rs67,700 crore from the recently concluded 3G auction as compared to the Budget estimate of Rs35,000 crore. Telcos have been asked to make the payments by the end of the current month.

The top gainers on the Nifty were Hindalco Industries (up 7.44%), IDFC (up 6.73%), Jaiprakash Associates (up 5.63%), Tata Motors (up 5.36%) and ICICI Bank (up 4.78%).

The losers on the Nifty were Reliance Communications (down 2.88%), Sun Pharma (down 1.69%), Idea (down 1.65%), ACC (down 1.62%) and ONGC (down 0.78%).

Foreign institutional investors were net sellers of Rs1,464.19 crore in the equity markets on Tuesday, while domestic institutional investors were net buyers of stocks worth Rs406.12 crore. The Indian rupee extended its rise on Wednesday on the back of gains in the equity market and the losses in the dollar against other major currencies.

At the time of writing, UK’s FTSE 100 was up 2.07%, Germany’s DAX was up 1.93% and CAC of France was up 2.73%.
 

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