Page 42 - Insurance Times November 2023

network is set to expand its services and bring in revolution management, and technology for the rapidly growing
in the Insurance sector. IRDAI has announced the use of insurance sector and allied Banking, Financial Services, and
Bima Sugam as its ONDC service which offers a digital Insurance (BFSI) sector at large for various roles in the areas
network and central distribution marketplace for insurance of underwriting and risk assessment, claim management,
products and services offered by distribution partners. product management, finance and remittance processing,
Another impressive development is the introduction of Bima policy acquisition, sales, and distribution, etc.
Vistar and Bima Vahak scheme which aims at establishing a
women-centric insurance distribution channel and stretching The sensitivity toward the necessity for insurance coverage
the insurance services to the last mile (semi-urban, rural among Indian citizens was created predominantly due to the
areas, and gram panchayats). pandemic crisis. When the visionary drive of IRDAI, and the
resilience towards the pandemic pervaded together it can
These developments will generate and create massive potentially provide exponential growth opportunities and
demand for a trained workforce; both fresher and benefits for all the stakeholders and the insurance (both life
experienced having domain knowledge in insurance, and non-life) sector at large. T

Standalone health, pvt multi-line insurance players see more gains
T he non-life-insurance industry had moderate The industry's aggregated gross written premium (GWP)

decreased 4 per cent Y-o-Y in August, 2023 due to lower
growth of 15 per cent year-on-year (Y-o-Y) in
premiums in crop insurance, export & credit, marine, etc.
August 2023. Core retail segments like motor and
health continue to report strong growth of 19-
20 per cent with competitive intensity still visible in the Standalone health and private multi-line players reported
higher GWP gains which means they took more market
motor OD (owner driven) segment. share from public sector undertakings (PSUs). When one
Commercial lines reported muted growth. Group health includes crop, Bajaj Allianz had a big 64 per cent growth in
remains a key driver. Among the listed companies, ICICI GWP due to 270 per cent growth in crop insurance. Both
Lombard continues to trail in the motor section while Star ICICI Lombard and Bajaj registered significant gains in GWP
Health has lost its Y-o-Y retail market share although its market-share but ICICI continues to lose market share in the
better on a sequential basis. Private general insurance motor segment. As far as listed stocks are concerned, there
players maintained 54 per cent market share with moderate hasn't been much change in share prices. Some analysts
17 per cent growth (ex-crop insurance). Motor OD growth continue to have 'buy' recommendations on Star despite the
has been strong at 19 per cent Y-o-Y in August, 2023 and 21 aggressive growth of other standalone health insurers. The
per cent in April-Aug, 2023. growth in motor section is expected to accelerate in

Increase in average selling prices of vehicles has supported Q3FY24, given the usual spurt in the festival season vehicle
motor growth. Motor owner driven growth has picked up to sales. Health growth seems to be driven by retail at the
17 per cent (from 11-15 per cent in the past two months) for moment.
ICICI Lombard but it is trailing the industry growth of 19 per Overall, ICICI Lombard gained a little market share in GWP
cent. New-age players such as Digit and Acko had 34-54 per but its underperformance on the motor side is a cause for
cent growth in August, 2023 (despite high expense ratios of some concern. As Bajaj Allianz is a joint venture between
35-58 per cent in Q1FY24). Other players like Bajaj Allianz, HDFC Allianz of Germany and Bajaj Finserv, it is hard to assess the
Ergo and Chola MS have been selective in the motor segment. impact of this segment on the share price. Among the PSUs,
SBI General has reported strong 29 per cent Y-o-Y growth New India Assurance has gained marginally while General
(ex-crop) in August, 2023 -- driven by motor insurance, up Insurance Corporation of India (GIC) has lost a little ground.
35 per cent in August -- which reversed a trend of decline According to Bloomberg, a majority (65-80 per cent) of
between April to July. In health, Star Health's retail growth analysts are positive on Star Health, ICICI Lombard and GIC
was 18 per cent in August. Other standalone health insurers RE; for New India, four out five have 'sell' recommendations.
like Care (up 56 per cent) and Niva Bupa (up 25 per cent) However, their target prices indicate 11.5 per cent upside
have done much better. However, Star retains dominant in in Star Health and 4.7 per cent in ICICI Lombard. For GIC
market share with around 32 per cent of the health and New India, analysts see a downside of 3 to 24 per cent.
insurance space. (Source: Business Standard)

38 November 2023 The Insurance Times