Mumbai:
With higher premium from fire and health insurance portfolio, the domestic general insurance industry is set to exceeed a total premium of Rs 2 lakh crore in 2019-20, despite onging slow down seen in the premium growth of motor and crop business, two top large contributers to the industry's premium base.
Though, crop insurance premium has fallen, with higher fire premium, non-life insurance firms reported a 14 per cent increase in the premium collection to Rs 1.73 lakh crore during April-February this fiscal, according to the Insurance Regulatory and Development Authority of India (Irdai) data. As many as 34 non-life insurance companies had collected a total premium of over Rs 1.52 lakh crore in the same period of 2018-19.
Public sector insurance firms witnessed a rise of 11 per cent in their premium income at Rs 76,369.72 crore during the first 11 months of 2019-20, the data showed.
SBI General Insurance reported a 112% year on year (yoy) growth in premium in February 2020, driven mainly by significant yoy growth in crop (on a very low base) and 225% growth in motor business; continuing the strong momentum seen in FY2020. SBI General has a balanced product mix with 20% contribution from fire, 20% from motor, 10% from health, 10% from personal accident and 35% for crop in FY2020.
The two specialised public sector companies, AIC and ECGC, reported a 25 per cent jump in the collection at Rs 10,032.72 crore in the period.
Private sector non-life insurance providers collected a total premium of Rs 97,072 .18 crore during April-February 2019-20, up by 17 per cent a year ago.
Seven standalone health insurers in the private sector reported a 21.31 per cent jump in their total premium income at Rs 12,602.31 crore in the period as against Rs 9,633.21 crore during the year-ago period.
According to a report of Kotak Institutional Equities,excluding crop insurance business, the general Insurance companies reported healthy premium growth (18% year on year(yoy) in February 2020, recovering from the 6% level of December 2019.
Two key reasons for this kind of higher growth are:
-Health was up sharply, up 42% yoy – highest growth rate in 13 months, on a low base,
-Fire business growth was strong (up 59% yoy vs 24% in January 2020) with higher reinsurance rates.
PSUs saw a sharp 67% growth in business – United India (up 147% yoy) and Oriental (up 86% yoy) being the growth leaders gaining market share from private players and specialized standalone players.
ICICI Lombard’s premiums grew 12% yoy; Bajaj (up 2% yoy) and Chola MS (up 5% yoy) posted weaker-than-industry numbers, on ex-crop basis. SBI General Insurance (up 94% yoy ex-crop) maintained robust momentum along with Acko and GoDigit.
Retail heath maintained strong momentum at 15% yoy growth in February 2020 while group health business was up 19% yoy.
Fire insurance premiums in the industry grew 59% yoy in February 2020, back to the 25-60% growth levels seen in March-November 2019 after declining 10% yoy in December 2019. Large private players including ICICI Lombard (up 146% yoy), HDFC Ergo General (up 71% yoy), Bajaj (up 35% yoy) and SBI General (up 37% yoy) posted sharp recovery in growth.
GIC Re had increased property reinsurance rates in March 2019 (average rise of 2X) for eight occupancies (comprising 35% of industry volumes) and, subsequently, for all 291 occupancies from January 2020. This has driven 37% yoy growth in 11MFY20.
Crop business slows down sharply in February 2020
Premium in crop business was down sharply by 52% yoy during February 2020, but up 21% YTD FY2020. YTD growth was led by PSU players (up 73% yoy on YTD basis) while private players’ business was subdued (down 3% yoy on YTD basis). HDFC ERGO General booked the highest crop business among general insurers in February 2020.