National Insurance Company aims to topple the country's leading non-life insurer -- New India Assurance Company -- as it heads to number one position in the general insurance sector this year.

"We expect our premium income to exceed Rs 4,000 crore (Rs 40 billion) this year, and thereby beat New India Assurance based on the volume of business," said chairman-cum-managing director H S Wadhwa.

National has in the first quarter of fiscal 2004 reported a growth rate of 15.6 per cent against its peers in the public sector, which have shown growth rates of less than five per cent.

According to the Insurance Regulatory and Development Authority figures for April-June 203, New India reported a growth rate of 1.5 per cent, United India Insurance 2.9 per cent and Oriental Insurance Company 3.8 per cent.

In fiscal 2003, National clocked a premium income of Rs 2,900 crore (Rs 29 billion), said Wadhwa.

New India mopped up over Rs 3,921 crore (Rs 39.21 billion) gross premium for its Indian business in addition to Rs 800-odd crore (Rs 8 billion) from its foreign operations in 2002-03, with total premium income exceeding Rs 4,700 crore (Rs 47 billion).

New India has been number one in the country on account of the volume of business garnered, as well as on the strength of its foreign operations, making it difficult for any of the public sector players to overthrow the leader, said insurance officials.

Competition for market share in the insurance sector has heated up since the privatisation of the industry. Against Rs 186 crore (Rs 1.86 billion) mopped up by public sector players in the first quarter of 2003, private players continue to grab new business, and have recorded a premium of Rs 622 crore (Rs 6.22 billion).

National is confident of exceeding its targeted growth rate of 30 per cent in the current year as it has tied up with various state governments, financial institutions and banks, as well as automobile manufacturers for business.

"On August 15, we tied up with J&K government offering health cover to all the government employees. We hope to mop up Rs 50 crore (Rs 500 million) premium from this state government by the year end," said Wadhwa.

In addition to J&K government, National is covering government employees of Haryana, Karnataka and is in negotiation with others.

Opening up of insurance has resulted in state-owned players deciding on their own growth paths. National has been picking up loss-making portfolios, rejected by its peers, said industry sources.

National is said to be willing to sacrifice margins for volumes so that increased premium income invested would yield returns to compensate underwriting losses.