Page 7 - Insurance Times July 2021

has maintained its negative market face several headwinds over the "The settlement should be completed
segment outlook on India's non-life medium-term. Factors that could lead within a month. Right now, it often
insurance industry as the ongoing AM Best to revise its segment outlook takes 5-10 years. The aim is to make
pandemic is likely to exacerbate to stable from negative include settlements faster and more
pressure on non-life insurers' evidence of sustainable improvement acceptable for the victim's family," he
underwriting and investment in underwriting performance, added.
performance. Factors supporting AM supported by better pricing discipline,
According to the plan, a website is
Best's negative outlook on the non-life as well as an improved balance of being developed by the General
insurance market include competitive overall earnings and stabilised Insurance Council (GIC) for real-time
market conditions, persistently poor economic indicators. reporting of accidents. The police or
pricing discipline and reliance on India saw the onset of the Covid-19 the victim's family will need to report
investment activities for profitability, pandemic, which led to a nationwide the accident immediately on this portal
which have been prevalent for a
lockdown for 2 months, and additional and call on a 24x7 phone number to
number of years. local lockdowns thereafter, Icra said. intimate the insurer.
In its report on 'India Non-Life This led to a slowdown in growth to 4 The Supreme Court, on 15 March,
Insurance', AM Best stated that per cent, at Rs 1.85 lakh crore directed that the police will have to
historically, India's economic growth (excluding premiums mobilised by submit the formal accident report
fundamentals have spurred non-life specialised general insurers) in FY21. electronically to GIC and MACT within
insurance market expansion. 48 hours, explaining the cause of the
However, in fiscal 2021, despite India's Road accident claims may accident. "This will be implemented as
GDP contracting by nearly 8 per cent, a general norm, and insurers have
the non-life insurance market achieved be settled faster agreed. The detailed accident report
a positive, albeit muted, growth rate The roads ministry, insurers and state (DAR) has to be submitted by police
of over 5 per cent. police departments are working on a
within a month, and MACT will have to
plan to slash the time needed for
Prospectively, AM Best expects the accept the applications and reports via
trajectory of non-life insurance claims' settlement for accident victims email. MACT will need to send the
premiums to continue to be one of from an average of five years now to summons via emails and conduct a
growth over the long-term, with rising just three months, two people aware hearing via video conferencing. Within
consumer awareness and accessibility of the plan said. a month, MACT will have to conclude
of insurance products. Road accident victims or their families the case, and then the insurer needs
More-recent market dynamics also will also be eligible to get immediate to send the money electronically to the
include heightened economic monetary relief based on a formula deceased's family," said the first
uncertainty and Covid-19 implications, developed by the Supreme Court, person.
which are expected to weigh further Motor Accident Claims Tribunal (MACT)
on non-life insurers. Although the and high courts, the people said on Edelweiss General Insurance
segment consists of a diverse range of condition of anonymity. The aim is to
insurance companies, the general reduce legal disputes over claims and registers 49% growth in
operating environment in India over make the process of claiming money FY21
the short-term will present clear from insurers simpler for road accident InsurTech startup, Edelweiss General
challenges for non-life insurers' victims or their families. Insurance (EGI), registered a robust
earnings and capital positions, it said. growth of 49 percent in premiums in
"Every year, claims worth at least Rs.
Additionally, AM Best expects 10,000-12,000 crore are raised by road FY21 over last year, while the private
regulatory and market advancements accident victims. Of this, insurers pay general insurance industry grew at an
to continue to drive investment in at least Rs. 5,000 crore on average. average of 5.1 percent in the same
digital infrastructure, which will likely The rest of the amount remains time period.
support India non-life insurers' online disputed, and the court cases go on for EGI's growth is primarily driven by its
sales, operations and risk years, which increases the distress for choice of segments - private car and
management.
victims' families," said one of the two retail health insurance, according to a
It said the non-life market is likely to people cited above. company press release. Private car YoY

The Insurance Times, July 2021 7