Page 40 - Insurance Times July 2021

8 HDFC Ergo General Ins. Co. Ltd. 9629.59 1480.97 15.38 16.39 15.92 15.25 NIL

9 ICICI Lombard General Ins. Co. Ltd. 13312.84 2368.18 17.79 5.71 8.91 19.16 Rs 75.08 Crs
10 IFFCO Tokio General Ins. Co. Ltd. 7961.04 744.24 9.35 2.23 6.99 9.93 NIL
11 KOTAK MAHINDRA General Ins. Co. Ltd. 433.39 136.59 31.52 23.64 32.21 NIL
12 Liberty General Insurance Limited 1531.37 576.54 37.65 14.03 24.38 31.26 Rs 113.15 Crs
13 Magma HDI General Ins. Co. Ltd. 1224.77 358.68 29.29 49.50 30.77 27.13 Rs 8.14 Crs
14 National Ins. Co. Ltd. 15312.88 5649.65 36.89 31.87 19.55 28.57 Rs 1261.64 Crs
15 Navi General Insurance Limited 157.99 117.95 74.66 67.34 75.97 NIL
16 The New India Assurance Co. Ltd. 29715.06 3827.23 12.88 11.09 8.64 13.29 NIL
17 Oriental Ins. Co. Ltd. 13996.01 3442.53 24.60 19.89 8.91 23.32 Rs 282.63 Crs
18 Raheja QBE General Ins. Co. Ltd. 158.12 94.81 59.96 21.92 100.00 32.59 Rs 43.66 Cs
19 Reliance General Ins. Co. Ltd. 7465.04 1259.79 16.88 9.31 2.99 17.91 NIL
20 Royal Sundaram General Ins. Co. Ltd. 3666.96 462.31 12.61 7.51 11.42 12.96 NIL
21 Shriram General Ins. Co. Ltd. 2466.18 473.2 19.19 14.15 11.64 19.26 NIL

Rs 204.21 Crs
Inhouse Claim
Processing Cost
excluded from
operating
expenses
22 Star Health and Allied Ins. Co. Ltd. 6865.14 1101.32 16.04 16.04 NIL
23 Tata AIG General Ins. Co. Ltd. 7384.53 1547.97 20.96 21.85 10.03 21.38 NIL
24 United India Ins. Co. Ltd. 17515.09 3488.51 19.92 21.36 16.62 19.49 Rs 55.33 Crs
25 Universal Sompo General Ins. Co. Ltd. 2859.05 285.77 10.00 5.17 2.62 10.42 NIL
Total 165509.94 33549.18 20.27

Overall Expense Ratio those insurers. Putting a cap on the expenses to be passed on
to the policyholders is not a solution for adverse effect of
The expense ratios of Indian Insurers range from 9.35% to
79.45%. Industry average hovers around 20%. Examining the such high expense ratio on sustained financial soundness and
ratios only of established players the range is still huge 9.35% viability of the business entity. Apart from being a concern of
to 36.89%. Even amongst the established public sector units management, it is also a matter of concern for regulator as
the range is 12.88% to 36.89%. Effective expense ratio the viability of the insurer is at stake.
appears to be a function of business volume. But it also appears
that the business model, profile of the portfolio, age of the Segmental Expense Ratios
insurer and specialisation do have a role in determining the Segmental expense ratios present an equally interesting and
size and shape of the expense ratio, because a company with diverse picture. Inter segment range of operating expense
a business volume 1/3 rd of the business volume of another ratio amongst established players is 2.23% for fire segment
company has an expense ratio 27% lesser than that of the to more than 28.57% for Miscellaneous segment. The intra-
latter. segment ranges amongst the same players are as follows. -
Fire 2.23% to 31.87% - Marine 6.99% to 24.27% and -
Yet, once a minimum volume of business is reached, the Miscellaneous 9.93% to 28.57%.
expenses should be in sync with the industry average. Volume
should compensate for variation produced from other factors. Apparently the segmental ratios are used for determining
Definitely the expense ratios of some of the insurers put a segmental performance do not affect the overall financial
question mark on the competitiveness and survivability of status of the entity. But in the long-run in view of its role in

40 The Insurance Times, July 2021