Atul Sahai, CMD, New India Assurance and chairman of General Insurance Council
Non-life insurance penetration touching 1 per cent is a very important milestone for the Indian non-life insurance industry. Despite being an extremely challenging year the non-life insurance industry clocked an accretion of nearly 10,000 cr which shows the resilience of the industry. Increasing awareness, also spurred by Mass Government Health Insurance Schemes, played a crucial role. I am happy to note that some 20 per cent of the entire accretion, in terms of quantum, came through New India and it is a remarkable feat, said Atul Sahai, CMD, New India Assurance and chairman,General Insurance Council,official representative body of all general insurers and exclusive health insurers
Mumbai:
Indian economy might have nosedived to record a sharp negative growth during Covid-19 Pandemic, but insurance penetration in the country rose from 3.76 per cent in 2019-20 to 4.20 per cent in 2020-21, registering a growth of 11.70 per cent, according to the annual report of insurance regulator Irdai.
While the penetration of life insurance sector has gone up from 2.82 per cent in 2019-20 to 3.20 per cent in 2020-21, non-life insurance penetration has gone up from 0.94 per cent to 1.00 per cent during the same period.
Post liberalisation of the Indian insurance industry since 2000,,it has taken 20 years for the domestic general insurance industry’s penetration to reach 1 per cent
Non-life insurance penetration touching 1 per cent is a very important milestone for the Indian non-life insurance industry. Despite being an extremely challenging year the non-life insurance industry clocked an accretion of nearly 10,000 cr which shows the resilience of the industry. Increasing awareness, also spurred by Mass Government Health Insurance Schemes, played a crucial role, said Atul Sahai, CMD, New India Assurance and chairman General Insurance Council,official representative body of all general insurers and exclusive health insurers.
“I am very proud of the contribution of New India Assurance to the Indian non-life industry by being the undisputed market leader over the last so many decades.I am happy to note that some 20 per cent of the entire accretion, in terms of quantum, came through New India and it is a remarkable feat.I think that the insurance companies with Enterprise level Business Continuity Plans during Pandemic proved to be the gainers and New India led the race with its core IT infrastructure.,” Sahai added.
During the first decade of insurance sector liberalisation, the sector had reported increase in insurance penetration from 2.71 per cent in 2001-02 to 5.20 per cent in 2009-10.Since then the level of insurance penetration declined till 2014-15 due to decline in life insurance penetration.
“Though the industry has been growing at a healthy CAGR over the last two decades and yet the penetration has touched just 1.00 per cent. This itself is indicative of the long runway of growth ahead of the industry and I am confident that New India will continue to lead the way. I am also confident that the industry will soon resume its high growth trajectory and has the potential to double the business in the next 4-5 years,” observed Sahai.
Insurance density in India,at the level of $78, has stagnated during 2019-20 and 2020-21 .The level of insurance density has reported consistent increase from $ 11.50 in 2001-02 to $64.40 in the year 2010-11.
While life insurance density has been hovering between $55 to $59 for last four years, non-life insurance density has been stagnating between $18 to $ 19 during the same period.
After some ups and downs, insurance density had recorded a steady increase from the year 2016-17.
Insurance penetration and density are two metrics, among others, often used to assess the level of development of the insurance sector in a country.
While insurance penetration is measured as the percentage of insurance premium to GDP, insurance density is calculated as the ratio of premium to population (per capita premium).
Life
Life insurance industry recorded a premium income of ₹6.29 lakh crore during 2020-21 as against ₹5.73 lakh crore in the previous financial year, registering growth of 9.74 per cent (12.75 per cent in 2019-20).
While private sector insurers posted 16.50 per cent growth (13.42 per cent in 2019-20) in their premium income, LIC recorded 6.30 per cent growth (12.41 per cent in 2019).
While renewal premium accounted for 55.67 per cent of the total premium received by the life insurers in 2020-21 (54.75 per cent in 2019-20),new business premium contributed the remaining 44.33 per cent (45.25 per cent in 2019-20).
During 2020-21, the growth in renewal premium was 11.60 per cent (7.00 per cent in 2019-20). New business premium registered a growth of 7.50 per cent in comparison to a growth of 20.59 per cent during the previous year-
As per Swiss Re, India is ranked eleventh in global insurance business. India’s share in global insurance market was 1.72 per cent during 2020 (1.69 per cent in 2019).
Total insurance premium volume in India increased by 0.1 per cent (-1.7 per cent ination adjusted real growth) in 2020 whereas global total insurance premium increased by a margin of 0.04 per cent (-1.3 per cent ination adjusted
In life insurance business, India has maintained its tenth rank in the world like previous year.India’s share in global life insurance market was 2.90 per cent during 2020.
Life insurance premium in India increased marginally by 0.6 per cent (-1.2 per cent ination adjusted real growth) in 2020 whereas global life insurance premium reduced by 3.1 per cent (-4.4 per cent ination adjusted real growth).
General Insurance
The general insurance industry underwrote total direct premium of ₹1.99 lakh crore in India for the year 2020-21 as against ₹1.89 lakh crore in 2019-20, registering a growth rate of 5.19 per cent as against 11.49 per cent growth rate recorded in the previous year.
The public sector insurers exhibited de-growth of 1.94 per cent in 2020-21, over the previous year’s growth rate of 6.71 per cent.
The private general insurers registered a growth rate of 8.00 per cent, against 11.63 per cent growth rate during the previous year.
Out of 27 private insurers (including stand-alone health insurers) operating in India, 20 insurers reported an increase in premium under written in the year 2020-21 as compared to the previous year.
In case of public sector general insurers,all companies except New India Assurance(NIA) witnessed contraction in their business with decrease in premium collections as well as market share over the previous year.
The market shares of NIA increased to 14.37 per cent in 2020-21 from 14.19 per cent in the previous year. NIA which collected direct premium of ₹28,548 crore, once again remained as the largest general insurance company in India.
The Motor business continued to be the largest general insurance segment with a share of 34.12 per cent (36.50 per cent in 2019-20). It reported de-growth of 1.68 per cent (6.86 per cent growth in 2019-20). The premium collection in Health segment continued to surge ahead at ₹63,753 crore in 2020-21 from ₹56,865 crore of 2019-20, registering growth of 12.11 per cent.
The market share of health segment has increased to 32.08 per cent from 30.10 per cent of previous year.
The premium collection in fire segment increased by 27.87 per cent and in Marine segments decreased by 1.25 per cent in 2020-21.
In non-life insurance business, India is ranked fourteenth in the world improved by one rank from last year. India’s share in global non-life insurance market was 0.77 per cent during 2020.
As per Swiss Re Sigma report, globally insurance penetration and density were 3.30 per cent and $ 360 respectively for the life segment and 4.10 per cent and $ 449 respectively for the non-life segment in 2020. Overall insurance penetration and density were 7.40 per cent and $ 809 respectively in 2020.