Motor, crop insurance biz declines, health rises 11%

In the motor portfolio, motor third party (TP) premium — which has not been hiked by the Insurance Regulatory and Development Authority of India (Irdai) in FY21 — has grown 5 per cent to Rs 10,650 crore.



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India’s general insurance industry narrowly missed the milestone of Rs 2 lakh crore of gross premium during 2020-21, due to the negative growth in motor insurance — the largest portfolio in the industry — and crop business.

The industry ended financial year 2020-21 with a positive year-on-year (y-o-y) growth of 5 per cent at Rs 1,98,735 crore, aided by growth in health insurance segment. While the health portfolio, propelled by the Covid-19 pandemic, has grown by 11 per cent to Rs 58,584 crore, two large business segments — overall motor portfolio and crop business — of the industry declined during FY21. Premiums in the overall motor portfolio have fallen by around 2 per cent to Rs 67,790 crore, while the crop business has fallen by 3.5 per cent to Rs 31,184 crore during FY 2020-21, according to figures compiled by GI Council and Irdai.

In the motor portfolio, motor third party (TP) premium — which has not been hiked by the Insurance Regulatory and Development Authority of India (Irdai) in FY21 — has grown 5 per cent to Rs 10,650 crore.

Motor OD (own damage) segment has surged by 138 per cent to Rs 4,136 crore, while the premium out of motor package has contracted by 7 per cent during the reporting period.

The fact that premiums in motor OD and motor TP have gone up despite the pandemic — when a long period of lock down has limited the use of all kinds of vehicles — shows more people have bought automobiles and more uninsured vehicles have got insured.

Despite the pandemic, which disrupted the domestic insurance industry extensively, New India Assurance (NIA) — powered by a global premium of around Rs 32,500 crore — has further scaled up its domestic market share to 14.33 per cent in FY21 from 14.11 per cent in 2019-20. It has ended the fiscal with a domestic premium of Rs 28,482 crore, showing a y-o-y rise of 6.22 per cent.

Among the top 10 general insurers that include three large PSUs, NIA is the only company which has the distinct achievement of positive premium growth, profitability and higher market share by expanding its core business organically in FY21.

“It was a hugely challenging year. I am happy that we could pull it off like this. As at the end of October 2020, though the business of general insurance industry on an average was down by some 10-12 per cent, we managed to just keep our head over water by showing some business growth in decimal points but then we went into a tizzy and in subsequent five months we managed to grow our business each month by 15-22 per cent,’’ said Atul Sahai, Chairman and MD, NIA.

The other PSU general insurers, United India Insurance (UII), National Insurance Company and Oriental Insurance Company (OIC), have ended the year with negative growth and lost their market shares during this period.

Led by Star Health & Allied Insurance, all six stand health insurers — at Rs 15,720 crore — have together grown 11 per cent y-o-y in FY21.

ICICI Lombard, the largest private sector general insurer, has grown its premium base by 5 per cent at Rs 14,003 crore, but its market share has almost remained flat 7.05 per cent last fiscal. The company has degrown its health portfolio by 6 per cent, while its motor business rose marginally during the year. Earlier, it had exited the crop business. However, the company will soon emerge as the second largest domestic general insurer after it takes over Bharti Axa General Insurance.

Together, the merged entity with a total premium base of Rs 17,160 crore will displace Chennai-based UII, the second largest general insurer. UII ended FY21 with Rs 16,710 crore of premium, recording a y-o-y degrowth of 5 per cent. Similarly, Bajaj Allianz General Insurance, with a gross premium of Rs 12,569 crore, has outranked Delhi-based OIC, with a premium of Rs 12,449 crore, as the fifth largest general insurer in the country in 2020-21.

With a premium of Rs 12,295 crore, HDFC Ergo General Insurance — after integrating HDFC’s health insurance arm with itself — has ended FY21 with a y-o-y growth of 28 per cent. Another mid-sized general insurer, SBI General Insurance, which may go for an IPO, has rapidly grown its premium base by 21.60 per cent y-o-y to Rs 8,264 crore in FY21.

Record new premium in FY21: LIC

Mumbai: Life Insurance Corporation (LIC) said it has collected the highest ever new premium at Rs 1.84 lakh crore, despite a highly challenging business environment due to the pandemic, in FY21. It also paid Rs 1.34 lakh crore as claims to policyholders.

The nation’s largest insurer achieved its highest ever first year premium income of Rs.56,406 crore under the individual assurance business, with a 10.11 per cent growth over last year. —ENS

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