Page 8 - Insurance Times August New 2023

it indicates that the insurer is making surance Regulatory and Development "Globally, it is a big market with 30-40
an underwriting profit; if it's above Authority of India (IRDAI)'s approval per cent trade finance being backed by
100%, then the firm could be spending for their credit insurance product and insurance. In India, it will take some
more in claims than it is earning are now looking to integrate their time to develop this market," said
through premiums. The insurer could product with the platforms, industry Ketan Gaikwad, MD and CEO of Re-
still be profitable because the com- players said. ceivables Exchange of India Limited
bined ratio does not take into account (RXIL).
"We are in talks with insurance com-
investment income.
panies. The initial interest is limited but "So far banks have been discounting
2-3 insurers have come forward, and invoices mostly for 'A-' and above-rated
TReDS platforms in talks we expect that once they start opera- customers. Lower-rated corporates
tions, we will see more interest," said were not getting credit sanctions and
with insurance cos post
Prakash Sankaran, MD and CEO, their vendor bills could not be dis-
RBI nod Invoicemart. counted. Insurers will bring liquidity on
the platform because now the risk can
After the RBI permitted insurance However, back-end technology integra-
be shared by them," said Sundeep
companies to come onto TReDS (Trade tion, digital upgradation for both
Mohindru, MD and CEO, M1xchange.
Receivables Discounting System) plat- TReDS and insurers, caution on the
forms earlier this month, players have part of insurers and financiers, and
begun discussions with insurers. How- development of NACH (National Auto- Insurance discount pro-
ever, they anticipate a gradual take-
mated Clearing House) capabilities for
off. posed for college, school
debit and credit for insurance compa-
nies, are ensuring that the roll-out is buses
TReDS platforms have largely been
approached by 2-3 general insurance slow and being done through pilot The ministry of road transport and
companies that have received the In- projects or a sandbox approach. highways (MoRTH) proposed a 15%
discount on motor insurance premiums
for buses in the service of educational
Gross premiums of non-life insurance firms up 18%
institutions, a move acknowledging the
in Q1 vital role they play in the safe transpor-
tation of students.
The gross direct premium underwritten for general insurance companies re-
ported an increase of 15 per cent year-on-year to Rs. 20,452 crore in June Additionally, private cars registered as
this year, compared to Rs. 17,809 crore in the same period last year, accord- vintage may be eligible for a substan-
ing to data from the General Insurance Council. tial discount of 50% on their insurance
premiums. This proposed discount rec-
Gross direct premium of 24 non-life insurance companies grew 13 per cent
ognizes the historical and cultural
at Rs. 17,638 crore in June 2023, against Rs. 15,639 crore in June 2022, while
value of vintage cars, aiming to pro-
for the five standalone health insurers, it grew 24 per cent at Rs. 2,475 crore
mote their preservation and create a
against Rs. 2,003 crore. Two specialised insurers - Agriculture Insurance Co
favourable environment for collectors
of India Ltd and ECGC - more than doubled their combined gross premium at
and enthusiasts.
Rs. 339 crore (Rs. 167 crore in June 2022).
"The proposed discounts for educa-
For the first quarter of FY24, the collective gross written premium of general
tional institution buses, vintage cars,
insurers grew 18 per cent y-o-y at Rs. 64,263 crore, compared to Rs. 54,489
and environmentally friendly vehicles,
crore for the same period in FY23.
along with the reduction in premiums
Gross written premium for 24 non-life players grew 16 per cent y-o-y at Rs.
for specific vehicle categories, reflect
56,917 crore (Rs. 48,860 crore in Q1 of FY23), while for the five standalone
MoRTH's commitment to creating an
health insurers, premium rose 27 per cent at Rs. 6,657 crore (Rs. 5,261 crore
inclusive and equitable motor insur-
in Q1 of FY23).
ance framework," the ministry said.
In Q1 of this fiscal, barring two PSU players - New India Assurance Co Ltd and
Other proposed discounts include a
United India Insurance Co Ltd - most of the other non-life players reported
15% reduction in premiums for electric
double-digit growth in their gross director premium underwritten (GDPW).
vehicles and a 7.5% reduction for hy-
Navi General Insurance and Raheja QBE reported a decline in GDPW.
brid electric vehicles. These discounts
8 August 2023 The Insurance Times