Page 8 - Insurance Times December 2020

the demerged company i.e. Bharti and motor insurance was Rs 7,183.5 crore Mantri Fasal Bima Yojana (PMFBY) this
AXA will be allotted equity shares of in October, compared with Rs 6,954.1 rabi season, as none of the insurance
the combined entity of Rs. 10 each crore in the same month last year, a companies have filed bids to imple-
with Bharti shareholders receiving growth of 3%. Motor insurance, which ment the scheme in these areas.
18.23 million shares and AXA receiving has two segments - motor own dam- Work to implement both weather-
17.52 million shares. age (OD) and motor third party (TP), based insurance as well as PMFBY for
also saw growth in October.
At present, Bharti Enterprises owns the 2019-20 rabi season has been de-
51% in Bharti AXA General, while its Gross direct premium for motor TP was layed due to lack of bids, said senior
France-based JV partner AXA has 49%. Rs 4,306.4 crore in October, up 4% officials of the state Agriculture de-
ICICI Lombard is a listed insurance compared with Rs 4,139.4 crore in partment. The first few tenders failed
firm, and Bharti and AXA will be public October last year. Premiums for motor to get the required number of bids and
shareholders in the combined entity OD went up by 2% to Rs 2,877 crore they had to be refloated. Heavy under-
after the deal. in the month under review. writing losses and political interference
are the main reasons the scheme has
The proposed merged non-life insur- "Robust festive demand and a gradual become nonviable, said sources in in-
ance company is expected to earn a rise in freight volumes and utilization surance companies.
total annual premium of at least Rs. rates supported premiums. Motor pre-
16,447 crore on a combined basis with miums have gradually improved from The state Agriculture department has
market share of around 8.7%, said the trough levels observed in April and May divided the 32 rabi districts of the
two companies in a joint media re- and will likely improve further," said state in six clusters and invited tenders
lease. the Kotak report. for the implementation of PMFBY in all
of them. The first tender was floated
"This is a landmark step in the journey Health insurance also saw surge in pre- on September 9 but failed to get the
of ICICI Lombard and we are confident miums in October. Gross direct premi- required number of bids for each clus-
that this transaction would be value ums for health insurance stood at Rs ter. In the second tender process, no
accretive for our shareholders. We are 4,074.8 crore, against Rs 3,840.6 crore bids were received for 15 districts, and
excited by the capabilities and in the year-ago period, growing by 6%. the tender had to be floated for these
strengths that Bharti AXA will add to Retail health saw surge in premiums by clusters again in November. However,
our franchise," Bhargav Dasgupta, 30% to Rs 1,982.6 crore. In the last 10 districts, including Beed and
MD & CEO of ICICI Lombard General few months, the pace of growth in Solapur, have not received any bids for
Insurance said earlier. retail health has slowed down, market implementation of the scheme.
players said.
Non-life insurance pre- "A slowdown in growth in retail health The PMFBY is a flagship programme of
the central government, under which
was likely an interplay of slowdown in
mium falls to Rs. 15,855 daily new Covid cases in India and both the state and central govern-
crore in October lower volumes during the festive sea- ments pay most of the premium, while
the farmer has to pay only 1.5-2 per
General insurers reported gross direct son. Standalone health insurers re- cent of it. The low premium rates and
ported a 32% Y-o-Y increase in health
premium of Rs 15,855.11 crore in Oc- premiums, led by a 43% Y-o-Y increase assured compensation in case of crop
tober, down 0.42% year-on-year. How- in the retail health business," said the loss has prompted farmers in
ever, motor insurance, which was go- report from Kotak Institutional Equi- Maharahastra to participate in the
ing through a challenging period in the ties. scheme in large numbers.
last few months due to the fall in new For the financial year 2018-19 , 1.39
vehicles sales, saw premiums pick up in crore farmers had opted for the
October. The pace of the growth in Farmers in Maharashtra scheme and the total premium col-
health insurance slowed due to the fall opt out of rabi crop cover lected was Rs 4,778.3 crore. Due to
in group health premiums. Farmers across 10 districts of the drought last year, the companies
Data from Kotak Institutional Equities Maharashtra may not be able to avail had paid out Rs 3,730.52 crore to
show that gross direct premium for crop insurance under the Pradhan 54.46 lakh farmers.
The Insurance Times, December 2020