Page 27 - Insurance Times September 2020

International

News

Saudi insurers struggling industry. Along with the motor indus- pre-COVID forecast of 11.9%, primarily
try reporting a decline in accidents due to the ongoing economic uncer-
with solvency and decline and claims during the lockdown, there tainty and the imposition of country-
in policy sales due to has also been a strong decline in the wide lockdown restrictions.
policy sales.”
COVID-19 Pratyusha Mekala, Insurance Analyst
However, insurers have utilized digital at GlobalData, comments: “The Indian
The ongoing consolidation in the insur- economy is projected to contract
ance industry is likely to accelerate due channels to keep the industry moving sharply by 4.5% in FY2021, primarily
to COVID-19 as the insurers continue throughout lockdown. due to the economic impact of the
to struggle. With lower profit margins Ms Mitra concludes: “Saudi insurers pandemic. With businesses coming to
and heavy losses, the pandemic is ex- are continuing their business via virtual a grinding halt and consumer spending
pected to add to the woes in the sol- ad online channels. Live chat on the on a decline, the general insurers are
vency position of the Saudi insurers, company’s website, Twitter and expected to witness lower premium
says GlobalData, a leading data and WhatsApp are among the key digital collection.”
analytics company. initiatives to stay connected to cus-
tomers.” The impact of economic slowdown is
GlobalData expects the general insur- most evident in motor insurance, which
ance market to increase gross written accounted for one-third of general in-
premiums (GWP) at a compound an- General insurance busi- surance premiums in 2019. During
nual growth rate (CAGR) of 1.6% in ness in India to contract January to July 2020, motor insurance
2020, down from the pre-COVID-19 by 9% in 2020 due to premiums registered year-on-year de-
expectations of 5.2%. Similarly, the cline of 19.2%, according to the Insur-
forecast growth of 3.6% in 2021 is COVID-19 ance Regulatory and Development
down from the previously expected General insurance business in India is Authority of India (IRDAI).
rate of 5.1%. However, losses are likely expected to contract by 9% in 2020 The recent regulatory changes are
to be almost recovered by 2023 with due to COVID-19, a sharp decline from expected to further affect motor insur-
the expected growth rate to be 5.2%, the 10% growth witnessed in 2019, ance premium. In March 2020, to pro-
which is marginally less compared to according to GlobalData, a leading vide relief to policyholders during the
5.4% that was previously estimated. data and analytics company. pandemic, IRDAI postponed planned
Deblina Mitra, Insurance Analyst at GlobalData has revised India’s insur- premium hike ranging between 2-10%,
GlobalData, comments: “The govern- ance forecast in the aftermath of on third-party liability insurance.
ment has made COVID-19 related COVID-19 outbreak. As per the latest Similarly, stagnation is expected in
medical care free of charge for all resi- data, India’s general insurance market property insurance as construction in-
dents, including foreign populations is expected to register a compound dustry grappled with supply chain dis-
who have overstayed their visit. This annual growth rate (CAGR) of 4.7% ruptions and shutdowns due to
will ease the burden on the insurance over 2019-2024, as compared to the lockdown restrictions.

The Insurance Times, September 2020 23