Overview of Non-Life Insurance Sector

Currently there are 78 insurance companies including two previously mentioned government owned corporations. Among these, 47 are non-life insurance companies and 31 are life insurance companies. 35 non-life and 12 life insurance companies are listed in the capital market. However, Insurance sector is still undergrown considering the age of privatization and comparing with other constituents of financial sector. Insurance products fall in negative demand category that means people are reluctant to buy an insurance policy unless there are any regulatory bindings or there is extreme necessity. Moreover, absence of good corporate governance and inadequate policy support also caused under penetration. An autonomous regulator was formed in 2010 after 26 years of privatization.

However, non-life insurance sector is concentrated. Among the listed non-life insurance companies, 47% of the gross premium is accounted for top five companies. Greendelta is at the top of the list with 14% market share, followed by Pioneer Insurance with 11%, Reliance Insurance with 10%, Pragati Insurance with 8% and Eastland Insurance with 4%. Concentrated market structure may be interpreted as lack of product diversity among the market participants and/or absence of thirst to capture new market beyond the existing market. This concentrated market structure, perhaps, an explanatory variable of the steeper competition that is prevailing in the non-life insurance sector.

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