The progress of fire insurance after nationalisation has been analysed under
1. Gross direct premium
2. Net premium and
3. Underwriting experiences.
1. Gross Direct Premium in Fire Insurance :
The gross direct premium in fire insurance has increased from Rs. 96.00 crores in 1975 to Rs. 142.28 crores in 1980, Rs. 318.94 crores in 1985, Rs. 581.91 crores in 1988-89 and Rs. 1248.18 crores in 1994-95.
New India has been the first company to procure maximum fire insurance business. It has increased its business from Rs. 38.79 crores in 1980 to Rs. 179.67 crores in 1988-89 by463.19 per cent.
Its gross premium was Rs. 415.44 crores in 1994-95. The business of United India increased by 405.99 per cent from Rs. 38.72 crores in 1980 to Rs. 157.20 crores in 1988-89 and its business was Rs. 327.19 crores in 1994-95. These companies have shown a higher rate of increase, as well as a higher amount of business.
Oriental has been at the third place and increased its business from Rs. 34.27 crores in 1980 to Rs. 128.41crores in 1988-89 by 374.70 per cent. Its gross premium was Rs. 262.21 crores in 1994-95. National has increased its business from Rs. 30.50 crores in 1980 to Rs. 116.63 crores in 1988-89 by 382.39 per cent and Rs. 243.34 crores in 1994-95.
New India has been at the top for increasing its gross direct premium with the help of a larger number of offices. National has been at the lowest ladder in all types of general insurance.
It has the smallest number of offices and the lowest figure of employees. New India has the maximum number of employees. It has higher productivity also. The fire insurance business in India increased firstly after nationalisation.
2. Net Premium :
Net premium of fire insurance has increased from Rs. 85 crores in 1973 to Rs. 106 crores in 1975, Rs. 157 crores in 1980, Rs. 354.02 crores in 1985, Rs. 493.88 crores in 1988-89 and Rs. 1333.21crores in 1994-95.
New India has increased its net premium from Rs. 53.01 crores in 1982 to Rs. 142.20 crores in 1988-89 by 268.20 per cent whereas the net premium of Oriental increased from Rs. 38.21 crores in 1982 to Rs. 102.20 crores in 1988-89 by 267.47 per cent.
United India increased its business from Rs. 48.44 crores in 1982 to Rs. 129.24 crores in 1988-89 by 266.80 per cent.
National increased its net premium from Rs. 35.93 crores in 1982 to Rs. 108.40 crores in 1988-89 by 301.70 per cent. Thus, the National Company having the lowest amount of net premium has shown the highest rate of growth.
New India has shown the second highest growth with the maximum amount of net premium. This company has been more efficient in expanding its fire insurance business than those of other companies.
GIC has increased its reinsurance business from Rs. 38.27 crores in 1982 to Rs. 118.40 crores in 1988-89 by 309.38 per cent which stood at Rs. 277.26 crores in 1994-1995.
The national companies have shown satisfactory progress. Before nationalisation, the fire insurance was not people in India.
These four companies have taken special initiatives to increase fire insurance coverage larger market and have shown a higher amount of net premium in 1994-95, i.e., Rs. 349.33 crores New India, Rs. 269.79 crores by United India, Rs. 216.08 crores by Oriental and Rs. 220.75 crores National Insurance.
3. Underwriting Experiences :
The underwriting profit of all the companies have increased from Rs. 63.69 crores in 1982 Rs. 95.40 crores in 1988-89 by 149.79 percent which raised to Rs. 1217.49 crores in 1994-95. The maximum amount of underwriting profit was Rs. 79.13 crores in United India in 1994-95.
It is quite a satisfactory profit amount, as its underwriting profit to net premium has also been the highest ii that year. National had the lowest amount of profit in 1982, 1988-89 and in 1994-95. Claims-ration has been 44.7 per cent in 1982, 51.8 per cent in 1985, 50.3 per cent in 1988-89 and 63.3 per cent in 1994-95 in case of New India.
It shows that the maximum claims-ratio has taken away larger position of net income. Oriental had the least claims-ratio and the highest expense-ratio in 1988-89. New India and National faced higher claims-ratio.
New India and Oriental has higher expenses-ratio also. The higher claims-ratios have been associated with the gross direct premium. Highest rate of profit in United India is attributed to lower claim and expenses-ratios in 1994-95.