The public sector general insurers led by the New India  Assurance (NIA) except Oriental Insurance Company(OIC) have lost out heavily their  motor business to the private sector companies in 2018-19.


The public sector companies- NIA, United India Insurance, National Insurance Company – have seen degrowth in their motor business during the year and together the four companies have shed almost 5 per cent, from 45 per cent to 40 per cent, of motor business to their private sector rivals. 


The public sector companies have attributed their losses in the motor portfolio business to the “unfair market practices and undisciplined market’ which has favoured the private sector players after the insurance regulator, IRDAI  , unveiled new MISP(motor insurance service providers) norms that limited the percentage of commissions that can be paid to the authorised dealers by  the general insurance players and benefit the customers.


The regulator has capped payments by insurers to agents and dealers at 19.5 per cent for cars and 22.5 per cent for two wheelers and brought them under its purview as motor insurance service providers from November 2017. 


“It is strange that a regulation that has been brought in for protecting the policyholder interest is allegedly not being treated sacrosanct by certain players. We do feel a little disadvantaged to certain extent  we are hoping that necessary corrections take place at the soonest,’’ said Atul  Sahai, CMD, NIA, the largest general insurer in the country.


Sources point out that though the PSU general insurers have urged the IRDA to act on these unfair practices, the regulator is yet to act on the issue.


NIA has seen its total motor portfolio shrinking to Rs 8,847 crore from Rs 9095 crore in 2018-19. Similarly, NIC has recorded a motor premium of Rs 6097 crore (Rs 7024) while UII has a booked a total motor premium of Rs 6741(Rs 7062) during the year.


On the contrast, some of the large  private sector players have aggressively expanded their motor portfolios in 2018-19.  


Among the players who have gown their motor portfolios in a larger way :ICICI Lombard General Insurance Rs 6423 crore(Rs 5249),Bajaj Allianz General Insurance Rs 4857 crore((Rs 4152 crore), HDFC Ergo General Insurance Rs 3060 crore(Rs 2307 crore),, Tata Aig General Insurance Rs 3791 crore(Rs 2813). Even an one year old company like Digit Insurance, set up by the partnership of PreM Watsa and Kamesh Goyal, a former  senior official of Germany major Allianz Kamesh Goyal, has garnered a total motor premium Rs 855 crore(Rs 74 crore) in 2018-19.   


This is also the first time that motor business, the largest portfolio in the Rs 1,7 trillion Indian general insurance industry, has moved southwards in its overall market share in the overall domestic general insurance market in 2018-19.


Though, the total premium, consisting of motor own damage and motor third party, has gone up by almost 19 per cent from Rs 59,248 crore to Rs 64,455 crore in 2018-10, the market share of motor portfolio has declined by one per cent from 39 per cent to 38 per cent during the year.


The premium out of the motor OD business has almost stagnated, at Rs 26,473 crore(Rs 26, 329), up 0.5 per cent, in 2018-19 though the motor TP business, a regulated business,  supported by the hike allowed by the IRDAI , has grown by 15.4 per cent to Rs 37,982 crore during the year.


However, the market share of both, in the domestic general insurance market, have declined during the year. While market share of motor TP  segment has plunged to 15.4 per cent from 22.3 per cent , the market share of  motor OD segment has fallen to 15.6 per cent from 17.5 per cent during the year.   


Remarkably, the segment that has seen quite a faster growth terms of premium and market share in 2018-19 is- health insurance, which at Rs 45,489 crore, has grown by 21 per cent  and has now a market share of 27 per cent(22 per cent).


However, the crop insurance, which is a major part of the industry’s miscellaneous portfolio, may have grown by 11 per cent to Rs 34, 176 crore,but  has fallen in its market share marginally to 20.1 from 20.5 per cent in 2018-19.


Portfolios like aviation and liability have grown by 33 per cent to Rs 544 crore and 19 per cent to Rs 2446 crore  respectively though their market share in the industry have stagnated at 0.3 per cent and 1.4 per cent respectively.