DETARIFFING OF FIRE HITS PREMIUM GROWTH IN INDIA

The partial detariffication of the Indian insurance market in January has led to a fall-off in the growth rate of insurance premiums in the first quarter of the financial year. Premium growth for the quarter from April to June was 12% over the same period last year. In Q1 2006 the growth rate over 2005 had been 23.4%. IRDA has recently lifted price controls in the fire, engineering, aviation and liability sectors. ICICI Lombard saw its growth rate decline from 92% to 9%. New India Assurance reported a decline to 6% from 16.4%, although National Insurance increased its growth rate to 8% from 3%. HDFC Chubb also reported an acceleration in growth, to 17.2% for Q1 2007 from 4.62%. Bajaj Allianz saw its growth rate fall from 41% to 27.6%. The total growth rate for the four public sector companies combined fell to 4.6% from 10%.