Page 27 - Insurance Times June 2021

August 1, the 3+3 and 5+5 motor policies for brand new
vehicles have been discontinued. As a result the ticket size
of insurance policies for brand new vehicles has taken a bit
of hit and this impact will be seen in the coming months as
well. The month of September is also expected to show a
drop as last year a lot of people purchased due to MV Act
and fines.

This year many customers from this segment aren't
renewing their policies is the absence of policing on that
front. Lockdowns are the best-case scenario for insurers as
there are fewer vehicles on the road, meaning fewer
accidents and fewer claims. Fewer claims mean extra
profits. Insurers are better off than before because of this
crisis and, therefore, there is a compelling necessity to offset
The provisional gross written premium (GWP) income by 34 the above risk-free premiums based on the claims cost saved
non-life insurers within India for FY 2019-20 is Rs. 1,89,301.76 during the lockdown. Despite the gradual revival of the
crore, of which the GWP under the motor portfolio within economy, motor insurance business recovery is expected to
India for 2019-20 (for both motor own damage and motor be stretched. The pressure on new vehicle sales is likely to
third party) is Rs. 69,208.14 crore. So, on an average, India's continue until 2021, resulting in sluggish growth in motor
motor premium per month is Rs. 5,767.34 crore. Lesser insurance premiums.
people have renewed their vehicle insurance this year. The
insurance industry is living up to its responsibilities to the References:
economy during this unprecedented crisis by making life less 1. https://www.livemint.com/science/health/vaccines-the-
miserable for millions of policy-holders and their families long-and-only-route
struggling for liquidity, and small businesses and traders with 2. https://www.moneycontrol.com/news/business/
no revenues, all of whom are hard-pressed because of the
exclusive-for-the-first-time-health
pandemic.
3. https://www.theactuary.com/2020/08/11/indian-motor-
insurance-market-contract-quarter
Customers are of the opinion that the vehicle may not be
4. https://www.globaldata.com/indias-health-insurance-
used for some time in the future due to lockdown or the
ongoing Corona scenario. And this majorly happened in Q1. business-to-grow-by-10-in-2020
Q2 seems better than Q1 for sure. Brand new vehicle sales 5. IRDAI Annual Report 2019-20
took a huge hit in Q1 and have started to pick up now. From 6. Newspapers & Journals

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The Insurance Times, June 2021 27