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Bajaj allianz life edges out ICICI pru to top in new policies
(Ecomonic Times, The (India) (KRT) Via Thomson Dialog NewsEdge) Feb. 27--MUMBAI, India -- Bajaj Allianz Life Insurance has upstaged ICICI Prudential at the No 1 position by recording the highest collections from new policies up to January '06. A large part of the collections is from single-premium policies and, therefore, non-recurring. If credits for single premiums are annualised (spread over the life of the policy), ICICI Prudential would remain No 1.
The total new business premium generated by Bajaj Allianz between April '05 and January '06 is Rs 1,680 crore against Rs 1,660 crore for ICICI Prudential. Sam Ghosh, MD, Bajaj Allianz Life, said sales from single-premium policies remained significant in January. "It means we will have to continue working hard to ensure that we stay ahead in February and March as well," he said.
"Bajaj Allianz seems to have gained momentum on a received premium basis. But as far as we are concerned, we are focused on growing the long-term business rather than the short-term business which is reflected in our funds under management of Rs 7,200 crore," said Shikha Sharma, MD, ICICI Prudential.
Mr Ghosh said the ability to maintain growth will depend on its agent recruitment. Bajaj Allianz has jumped to No 1 from No 5 in March '04. Before '04, it wasn't even among the top 5, while ICICI Prudential had been the largest private insurer from the outset.
While ICICI Prudential has a paid-up capital of over Rs 1,000 crore, for Bajaj Allianz, it's Rs 358 crore. This is partly because the reserve needs for single-premium policies are lower. Also, it has kept branch expenses low.
In the last five years, most insurers have moved to investment-linked policies to counter the fall in interest rates coupled with the equity boom. Compared to MFs, insurance companies can mobilise retail resources better because of their agency force. As most insurance companies' promoters have a MF arm , this is a conflict area. Bajaj Allianz is among those whose promoters don't own a MF.
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