Page 22 - Insurance Times Janaury 2021

insurance sector including Health Insurance. General exposed to, steps taken to mitigate the burden on the
insurance compensates the insured peril linked to property industry & policyholders and the way forward.
or assets and against any claims that may arise due to
lawsuits or hospitalisation. Year wise general insurance 3. Impact of COVID-19 on General
premium figures from 2000-01 indicating an upward
movement over the years is provided in Figure 1 to Insurance sector:
understand the pre-Covid GI scenario in India. Further, non- With more than 63 lakhs cases at the end of September
life insurance density has increased from 2.4 USD in 2001 2020 (Ministry of Health and Family Welfare, GoI), hospitals
to 19 USD in 2018 (growth of 692%) & non-life insurance are getting overloaded leading a toll on health insurance
penetration has increased from 0.56% in 2001 to 0.97% in sector with increase in hospitalisation claims. Also business
2018 indicating growing share of non-life insurance markets entities got affected due to lockdown and other social
in India (IRDA, FY 2018-19 annual report). distancing measures. Due to lockdown the insurance
premium collection figures of certain segments have seen a
Figure 1: Yearwise General Insurance decline thereby affecting the general insurance sector as a

premium in India whole.

Decline of 8.60% in general
insurance premium is noticed in
March 2020 mostly due to
imposition of lockdown with less
premium collection and reduced
number of new policies. Personal
accident was the worst hit
segment (decline by 53.03%) and
with reduced economic activities,
credit offtake diminished leading
to contraction in Credit guarantee
premiums (by 41.99%). Further,
motor, health and other
miscellaneous segment also experienced a significant decline
(Source: IRDA annual reports)
in March 2020 (IRDA).
It is evident that post-liberalization of Insurance sector which
has commenced from the year 2000-01, general insurance Lockdown continued from April to May 2020 with
premiums have increased from Rs 10087.03 crores in 2000- subsequent phase-wise lifting of lockdown commencing from
01 to Rs 189301.75 crores in 2019-20 indicating a growth June 2020 and gradual opening up of economic activities.
of 1776.68% with an exceptional growth in the last 5 years. Table 1 highlighting general insurance gross premium for the
However, the Covid-19 situation posed a challenge to the months of March-May 2020 may be studied to understand
sector with rising infections and reduced business activities. the implications of lockdown on GI.
Insurance regulator Insurance Regulatory and Development
Authority of India (IRDA), Government of India (GoI) and
statutory body of general insurance segment (General
Insurance Council) have taken slew of measures to
overcome the adverse impact on the GI sector.

2. Objectives of the study:
Some studies have been conducted to assess the impact of
COVID-19 on Indian economy (Dev and Sengupta, April 2020;
Das and Patnaik, May 2020), however, study on Indian
general insurance sector are less extensive. This study is a
modest attempt to assess the impact of COVID-19 on general
insurance sector in India, the present situation the sector is

22 The Insurance Times, January 2021