Page 10 - Insurance Times May 2023

cent growth in FY22. It expects 17 per Air India to get $10-billion PSU general insurers'
cent growth in FY23 and is targeting
cover from Tata AIG, oth- market share decreases
over 20 per cent in FY24.
ers The four public sector general insur-
"Due to Covid, we were not doing very
ance companies have lost 800 basis
well up to 2021-22, but 2022-23 was a Tata AIG General Insurance and oth-
points (bps) in market share in last
good year. We saw a growth of about ers have received the contract to pro-
five years to their private counter-
28.27 per cent up to February and are vide $10bn cover to Air India and its
parts. In 2018-19, the four had a
likely to reach 28-29 per cent by year- low-cost international subsidiary Air
cumulative market share of 40.04
end. We also expect to grow by 40 per India Express.
per cent, with New India Assurance
cent in FY24," said Anil Kumar Under the contract, the airline will pay having a market share of 14 per
Aggarwal, MD & CEO, Shriram Gen- $30m premium this fiscal year, which cent and United India Insurance
eral Insurance. began on 1 April. with a market share of 9.63 per
cent. But, gradually in the past five
Tata AIG General Insurance, has
years, these state-backed firms
Brokers surpass agents as bagged a significant share of insurance
have lost their market share to pri-
premiums, becoming the "lead in-
top in distribution of non vate sector players, due to the de-
surer."
clining health of their business.
life policies
The leader will receive around 36% of
The latest data shows that at the
Brokers are playing a bigger role in the
the premium and higher risk compared
end of FY23, the market share of
distribution of non-life insurance in In- to the rest of the members in the con-
these firms cumulatively declined to
dia, with their share of premiums dou-
sortium.
32.37 per cent -- a drop of 803 bps.
bling to over 35% from 17% over the
According to an industry source, the Among the four insurers, New India
last 10 years. Individual and corporate
airline secured a good deal for its en- Assurance witnessed a marginal fall
agents have seen their share of premi-
tire fleet despite the ongoing Ukraine in its market share, of just 64 bps,
ums shrink in the same period.
conflict. and maintained its position as the
The biggest driver of this shift has been
The airline was provided an insurance country's leading general insurer.
motor insurance. Over the years, most The other three, however, wit-
cover of $8bn last year. It plans to in-
auto companies have floated their own nessed a considerable erosion in
crease its cover to $10bn this ongoing
insurance broking firms, which enables their market standing. Kolkata-
financial year as it will likely increase
their dealers to sell insurance policies based National Insurance Company
the fleet.
of multiple companies. Earlier, dealers saw the most erosion in market
It is stated in the report that the in-
had corporate agencies. share of over 300 bps, followed by
surance cover is for Air India's 140 air- United India Insurance (276 bps),
Online distributors like Policybazaar
craft and Air India Express' 26 Boeing and Oriental Insurance (171 bps).
and Coverfox too have obtained insur-
737 aircraft.
Except for New India Assurance, the
ance broking licences. With the 2020
Other insurers in the consortium, apart state-owned general insurance
amendment of insurance rules, foreign
from Tata AIG and NIA, include GIC Re, firms suffered huge losses and have
investors are allowed to hold 100% in
United India Insurance, Oriental Insur- seen a depletion in their solvency
insurance distribution, resulting in sig-
ance Company, and ICICI Lombard margin, leaving limited room to fo-
nificant investment.
General Insurance. cus on growth.
The increase in brokers' share has im-
According to FY22 disclosures, Ori-
plications for the non-life industry in
Centre mulls 'free insur- ental Insurance suffered a net loss
light of the insurance regulator lifting of Rs 3,104 crore; United India
ance' for cows, 100% sub-
the caps on commissions. Insurers also Insurance's loss was to the tune of
have lesser control over the distribu- sidy on premium likely Rs 2,135 crore and National Insur-
tion as brokers are not affiliated with ance Company's losses mounted to
Ahead of the 2024 general election,
any company unlike corporate agents. Rs 1,664 crore. Among the four
the government plans free insurance
Insurers say that this is a sign of ma- for cows as currently, farmers pay 20- state-owned insurers, only New In-
dia Assurance reported a net profit
turing of the industry and will lead to
50 per cent of the premium charged
of Rs 164.27 crore.
more awareness.
by insurance companies even after
10 May 2023 The Insurance Times