Though, the Indian general insurance industry, at Rs 1,98,735 crore, has ended the FY 2020-21 with a positive year on year (y-o-y) growth of 5 per cent, once again, thanks to Covid 19 Pandemic. it has missed out the much cherished milestone of Rs 2 trillion of gross premium during the year narrowly, due to negative growth in moror insurance, the largest portfolio in the industry and crop business., .
Analysts point out that the Health portfolio, expected to be propelled by Covid 19 Pandemic, has only grown by 11 per cent to Rs 58,584 crore there have been slow down in two large business segments-overall motor portfolio and crop business- of the industry during FY 2020-21.
Premiums in the overall motor portfolio has fallen by around two per cent to Rs 67,790 crore while th crop business have fallen by 3.5 per cent to 31184 crore during FY2020-21. .
Among the main components of the motor portfolio, motor third party(TP) premium, which has not been hiked by the IRDAI in FY2020-21,has grown by 5 per cent to Rs 10,650 crore,motor (own damage) segment has surged by 138 per cent to Rs 4136 crorewhile the premium out of motor package has contarcted by seven per cent during the reporting period.
The fact that premiums in Motor OD and Motor TP have gone up despite Covid-19 Pandemic, when long period of lock down has limited the use of all kind of vehicles,shows more people have bought automobiles and more uninsured vehicles have got insured, said analysts adding that the prediction, that Motor portfolio will be overtaken by Health Portfolio as the largest segement in the industry baecause of Covid-19 Pandemic, hasn't happened.
In one of the distinct achievements in the industry, despite Covid-19 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 during the year from 14.11 per cent in 2019-20.
The company has operations in 28 countries.
The largest listed non-life company in the country, uniquely, has maintained its positive and profitable growth consistently through out 2020-21, and has ended year with a domestic premium of Rs 28,482 crore, showing a year on year (y-o-y) rise of 6.22 per cent.
Analysts point out that among the top 10 general insurers that include three large PSUs and , NIA is the only company which has the distinct achievements of positive premium growth, profitability and higher market shares by expanding its core business organically in FY 2020-21.
“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 to 22 per cent each month,’’ said Atul Sahai, CMD, NIA.
“And at the end, we managed to clock some 7 per cent upto the month growth, which given the large business base (the largest in the industry of course) and the circumstances we have been passing through as a nation, is a huge attainment,’’ felt Sahai.
This growth for NIA has been most evenly distributed over different line of business like Motor, Misc, Marine, Health etc, he explained.
“We hope to continue on this trajectory in coming months too. Repeating, the FY just gone by has been most challenging and rather emotionally and physically draining, given the spread of Covid. The way each member of team New India has responded to the challenges makes an amazing story of grit and determination,’’ observed Sahai.
The other PSU general insurers United India Insurance, National Insurance Company and Oriental Insurance Company have ended the year with negative growth and have lost their market shares during the period.
Led by Star Health & Allied Insurance,all the six stand health insurers, at Rs 15,720 crore, have together grown by 11 per cent y-o-y in 2020-21.
The largest private sector general insurer, ICICI Lombard general insurance, at Rs 14,003 crore, has grown its premium base by 5 per cent but its market share has almost remained flat 7.05 per cent during the year.
The company degrown its health portfolio by 6 per cent and grown its motor business marginally during the year.Earlier, it had exited 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 will displace Chennai based second largest general insurer UII that has ended the FY 2021-22 with Rs16, 710 crore of premium , recording a y-o-y de-growth of 5 per cent.
Similarly, Bajaj Allianz General Insurance, though, has seen a fall in its gross premium marginally to Rs 12,569, has outranked Delhi based OIC, with a premium of Rs 12,452 crore, as the fifth largest general insurere in the country in 2020-21.
With a premium of Rs 12,295 crore, HDFC Ergo General Insurance, after integrating HDFC ERGO Health Insurance,HDFC’s health insurance arm with itself, has ended FY 2020-21 with a y-o-y growth of 28 per cent.
Another mid-sized general insurer, SBI General Insurance, which may be going for an IPO in FY 2021-22, has rapidly grown its premium base by 21.60 per cent y-o-y to Rs 8,264 crore in FY 2020-21.
Among the small ones, Raheja QBE General Insurance Company, which is being acquired by Indian payments firm Paytm, owned by One 97 Communications Ltd. along with its founder Vijay Shekhar Sharma, at Rs 272.22, has grown its premium by 72 per cent y-o-y, by mainly focusing on clinical trial covers provided for developing Covid-19 remedies.
While the PSU general insurers, except Agriculture Insurnace Company, have cut downn their exposures for crop business by almost 50 per cent, private sector insurers like Bajaja Allianz General, HDFC Ergo, Reliance General and Univeral Sampo have grown their crop premiums substantially during the year.