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ANNUAL REPORT 2011-12
increased by 25.27 per cent to `2,999 crore in 2011-12
from `2,394 crore in 2010-11. The increase in
underwriting losses of the private sector insurers is
mainly due to increase in the reserve for unexpired
risks.
TABLE I.23
UNDERWRITING LOSSES : NON-LIFE INSURERS
Expenses of Non-Life Insurers
(` crore)
2010-11 2011-12
Public Sector 7549.50 5817.39
(66.24) (-22.94)
Private Sector 2394.03 2999.45
(72.51) (25.29)
Total 9943.53 8816.84
(67.72) (-11.33)
Note : Figure in brackets indicate growth in per cent over
previous year.
I.3.45 The commission expenses of public and private
non-life insurers stood at `2,258 crore and `1,080 crore
respectively for 2011-12, cumulatively amounting to a
total commission expense of `3,338 crore for the nonlife
industry. The commission expenses continued to
be the highest in the Motor segment, which stood at
`1,098 crore, comprising of `658 crore for the public
sector and `440 crore for the private sector companies.
I.3.46 Commission expenses and operating expenses
constitute a major part of the total expenses. The
operating expenses of non-life insurance companies
stood at `11,178 crore in 2011-12 as against `10,620
crore in 2010-11, registering overall growth of 5.25 per
cent. The operating expenses of the public sector
decreased by 1.87 per cent over previous year,
whereas the operating expenses of the private sector
increased by 17.35 per cent over previous year.
I.3.47 As per section 40C of the Insurance Act, 1938
no insurer can spend as expenses of management in
any year an amount in excess of the limits prescribed
under Rule 17E of the Insurance Rules, 1939. Rule
17E takes into consideration the size and age of the
insurer while stipulating the limits of these expenses.
The Authority based on the recommendation of the
General Insurance Council constituted under Section
64F may enhance the limits in any year.
I.3.48 The Authority has granted exemption on the
limits under Rule 17E to seventeen private insurers in
the fi rst fi ve years of their operations. The period of
five financial years shall be in addition to the first partial
financial year during which the individual insurer
commences business operations.
I.3.49 Out of the twenty four non-life insurance
companies (including the four public sector undertakings
and the two specialized institutions) in the year
2011-12, ten companies are in the exemption period.
Of the balance, seven are compliant with the limits
under Rule 17E.
TABLE I.24
COMMISSION EXPENSES : NON-LIFE INSURERS
(` crore)
Segment Private Sector Public Sector Total
2010-11 2011-12 2010-11 2011-12 2010-11 2011-12
Fire 77.05 103.32 267.79 325.65 344.84 428.97
Marine 53.59 66.51 141.57 176.28 195.16 242.78
Motor 315.05 440.08 576.03 658.14 891.08 1098.22
Health 185.51 242.10 525.18 585.45 710.69 827.55
Others 182.11 227.80 432.77 512.56 614.89 740.37
Total 813.32 1079.80 1943.34 2258.09 2756.66 3337.89
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