Private Sector Life Insurers Sailing in Choppy Waters :(

Private insurers sailing in choppy waters

Even after 8 years in operations, most of the companies seem to be sailing in choppy waters while the latest profit/loss numbers reveals that almost all of the 22 companies are still making losses.


Net losses of the private sector life insurers have risen to a whopping Rs 4850 crore during the last fiscal from 2001-2002, showing a uncanny rise of over 2000%.


However, Reliance Life has suffered the highest loss of Rs 1085 crore and its pool of the policy holders fund is a meager Rs 50 crore.

Moreover, ICICI Prudential Life is sitting on a net loss of Rs 780 crore while the cushion for policy holders is Rs 200 crore.

As for Birla Sunlife, the loss amounts to Rs 700 crore with a 130 crore surplus for the policy holders fund while HDFC Standard Life has netted losses of Rs 500 crore with a policy holders fund of 160 crore.


Additionally, IRDA is looking at the numbers very closely now and is also doing a check on the risk profile of individual companies and trying to build in a system of early warning given the fact that life insurance is a long gestation business.


Meanwhile, it is the speedy expansion in business that has cost the companies dear and the coming days will see a change in strategy.


At the same it is said that such multi million losses may hit valuations of private life insurers especially if the companies are keen to list on the stock exchanges.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: