Mumbai:
Even as complete nationwide lock down to check the spread of covid-19 Pandemic has deeply impacted the economic activities in the country, the general insurance industry, with 34 players including seven stand alone health insurers, have seen their premium income falling by almost 10 per cent year-on-year in the month of May and the first two months of the current fiscal.
Led by the largest general insurer in the country, New India Assurance(NIA),which however itself has successfully scored a positive growth consecutively for the second month – May, the industry has a total premiums of Rs 11,160 crore in the month of May against Rs 12,233 crore in May , 2019-20.
The industry’s total premiums in the first two months of the current fiscal stand at Rs25,269 crore as against Rs28,124 crore in May 2019-20.
Only 12 companies including four stand aloneg health insurers and state owned Agriculture Insurance Company(AIC) have managed to improve their premiums during the reporting month over the corresponding period of the previous year..
However, among the top 15 general insurers only listed NIA, state owned United India Insurance( second largest general insurer in the country), Star Health(largest exclusive health insurer and 11th largest general insurer), Future Generali general insurance,(14th largest general insurer) have remained in the positive zone in their premium income.
The NIA despite not adding any premiums from crop business has managed to grow its premium by 3 per cent y-o-y to Rs 1821 crore in May 2020-21 while for the first two months,the company's premiums have expanded by 5,50 per cent y-o-y Rs 4,982 crore.
“We have again managed to grow our business by some 3 per cent in the month of May '20, taking the business growth up to the month to 5.5 per cent Though its not much but the importance of this growth can be visualized only when seen in the backdrop of the fact that the General Insurance (Direct) Industry declined by some 15 per cent during the period. We have managed this performance thanks to our strong digital presence and the commendable team work shown by the Corporate team and our numerous office in-charges and their respective teams,'' said Atul Sahai, CMD,NIA.
“It has taken real hard work, in such challenging times, to stay in positives. What is more or equally important that during this period, when we are not able to open offices in a regular manner, we have continued to settle the claims with equal efficiency by electronic means. Hope its not clichéd to say 'tough times do not last but tough teams do'. However, it would be extremely challenging if such period continues for some more months,'' he added..
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The premium of four PSU general insurers (NIA,UII,Oriental Insurance Company,and National Insurance Company),at Rs 4,872 crore ,in May 2020 as against Rs 4,898 crore in May 2019), have almost remained flat.
The private sector general insurers(excluding the stand alone health insurers), led by ICICI Lombard General Insurance, have seen their premiums plummeting by 15 per cent to Rs 5,137 crore during the month of May. Till May, these companies at Rs 13,780 crore have also lost around 15 per cent y-o-y of their premiums.
ICICI Lombard General Insurance, that has been shrinking its top-line as a matter of conscious strategy to grow its bottomline,at Rs 880 crore has further degrown by almost 20 per cent y-o-y during the month of May .
Contrary to the expectation that the exclusive health insurers are doing brisk business as people may be rushing to buy health covers due to Covid-19 pandemic,seven exclusive health insurers together have lost premiums, though marginally. During the month of May.their total premiums stand at Rs 1,032.1 crore in May 2020-21(Rs 1,040.2 crore in May 2019-20).
In the first two months of the current fiscal, the stand alone health insurers at Rs 1,920 crore(Rs 1,871 crore) have fared slightly better.
It is worth noting that in the month of April, when the industry’s total premiums had also nosedived by 10 per cent,the premiums out of the fire portfolio not only had gone up by 41 per cent y-o-y to Rs 4028 crore also the portfolio had beaten motor and health portfolios to be the largest portfolio for the industry during the month.
The rise in the fire portfolio was due to higher reinsurance premium set by the state owned GIC Re, since the Apr 1 renewal, that made the general insurers to hike their fire premiums for the India Inc.
The total motor premium had tumbled by almost 50 per cent y-o-y to Rs 2621 crore while the health portfolio bolstered by group health portfolio had gone up by 6 per cent y-o-y to Rs 5379 in the month of April..
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The overall trend in the domestic general insurance industry will continue like this where fire portfolio will perform better than motor,health and crop portfolios,''said analysts.