Page 5 - Insurance Times November 2019

General Insurance

News

ICICI Lombard General Insurance sector registers substantial growth despite

records 5% growth in Q2 economic slowdown
net profit Despite the economic slowdown, the insurance sector of the country has re-
corded a substantial growth rate in premiums, as per
As the quarter ended in September the data. Former IRDAI member KK Srinivasan said, “In
30, 2019,
general insurance, in my view, the spurt is primarily
ICICI
because of two reasons: the increase in motor third
Lombard
party insurance rate and the hefty spot penalties by
General traffic police as per the new Motor Vehicles Act for
Insurance failure to possess vehicle insurance.”
recorded a 5% growth in net profit
due to long-term motor policies and “The attractiveness of the retail pension (or savings) products with guaranteed
losses from natural disasters in vari- returns as against the bank deposits could have been one of the reasons in the
ous states. life insurance segment,” KK Srinivasan added. Both life and non-life insurance seg-
ments saw robust growth in terms of premiums collected till the six-month pe-
The insurer’s net profit grew to Rs
riod ended September 30 of FY20. It comes even as the automobile sector that
307.9 crore from .Rs 293 crore dur-
ing the same quarter a year ago. The contributes maximum in terms of premiums to the general insurance sector
company has also announced a pay- slowed down substantially. However, extended slowdown may hurt the prospects
ment of interim dividend of .Rs 3.5 of the insurance sector in the coming months, the experts also said.
per equity share of face value of .Rs A rise of 35% at Rs 125,758 crore was recorded in the life insurance premium
10 each, for the half-year ended on of all 24 players in the April-September quarter of the FY20, according to the
September 30, 2019. Life Insurance Council. In the first six months of the ongoing fiscal the new
premium collected by LIC zoomed 42% to Rs 89,980 crore. For the rest of the
Meanwhile, the insurer also re-
private sector players, the cumulative premium till September 2019 rose 21
corded combined ratio, a measure
of profitability, grew 102.6% from per cent to Rs 35,778 crore, the data showed.
101.1% as a result of increase in The general insurance industry in September has grown by almost 40% at Rs
claims. 19,047 core. The public sector insurers have mopped up a premium of Rs 8,873
crore, up 43% while the private sector companies have mobilised a premium
The company maintained its guid-
ance on return on average equity at of Rs 10,174 crore, up 37% during September, the data revealed.
over 20%. As the company stayed
away from writing crop insurance, Reliance General Insurance withdraws proposed IPO plan
gross domestic premium income fell Reliance General Insurance has decided to withdraw its proposed initial share
16% to Rs 2,953 crore. sale offer. The initial public offering (IPO) was slated for fresh issue of shares
“Over the last three years we have worth Rs 200 crore, besides an offer of sale of 79,489,821 shares by Reliance
seen crop insurance rates harden- Capital. Markets regulator SEBI had received draft red herring prospectus for
ing,” said Bhargav Dasgupta, MD, the proposed IPO on February 8 through lead manager (LM) of the issue Motilal
ICICI Lombard General Insurance. Oswal Investment Advisors.
The Insurance Times, November 2019 5