Page 5 - Insurance Times December 2020
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General Insurance

















         PSU insurers asked to re-          companies during 2019-20. During this  While New India Assurance contrib-

         duce avoidable expenses            year, the government infused Rs 3,475  uted the highest net profit of Rs 1,418
                                                                               crore, the sector - comprising 32 play-
                                            crore, while announcing infusion of the
         Finance Ministry has asked 3 PSU Gen-  balance Rs 6,475 crore in one or more  ers - has been saddled with total losses
         eral insurers, National Insurance, Ori-  tranches.                    of Rs 1,402 crore in FY2019-20.
         ental Insurance and United India Insur-  The government in Budget 2020-21  The industry had made a net profit of
         ance, to rationalise branches and cut  had made a provision of Rs 6,950 crore  Rs 683 crore in fiscal 2018-19 as com-
         down avoidable expenses to improve  for capital infusion in these three in-  pared to a net profit of Rs 6,909 crore
         their financial health.
                                            surance companies to maintain the  in 2017-18. The three PSU general in-
         The ministry has asked these compa-  requisite minimum solvency ratio.  surers, with their large underwriting
         nies to expand their business through  NICL, with a combined ratio of 160.8  losses of Rs 14,443 crore, together have
         digital  medium.  They've  also been  per cent and underwriting losses of Rs  been responsible for the overall losses
         asked to cut the flab by rationalising  5,759 crore, has suffered losses of Rs  of over Rs 7,118 crore in FY 2019-20.
         branches and rein in other avoidable  4,108 crore, while OICL (141 per cent,  NIC, with a combined ratio of 160.8
         expenses like guest houses, etc,
                                            Rs 4,197 crore) and UIIC (132 per cent,  per cent and underwriting losses of Rs
         During the current year the Ministry  Rs 4,487 crore) have been hit with  5,759 crore, has suffered losses of Rs
         decided to halt the merger process of  losses of Rs 1,524 crore and Rs 1,486  4,108 crore, while OIC (141 per cent,
         three state-owned general insurance  crore, respectively in 2019-20. How-  Rs 4,197 crore) and UII (132 per cent,
         companies due to their weak financial  ever, New India Assurance, the only  Rs 4,487 crore) have been hit with
         positions. Instead, the government  exception out of the four public sector  losses of Rs 1,524 crore and Rs 1,486
         approved fund infusion of Rs 12,450  general insurers, posted a profit of Rs  crore, respectively, in 2019-20.
         crore to meet regulatory parameters.  1,418 crore in 2019-20.         Out of 20 private sector general insur-
         As part of capital infusion exercise, the                             ers excluding the stand-alone health
         government  also  approved  raising  Underwriting losses of In-       insurers,  11  players,  led  by  ICICI
         authorised share capital of National                                  Lombard General Insurance (with a net
         Insurance Company Ltd (NICL) to Rs  surance Industry rise to Rs       profit of Rs  1,194  crore) have suc-
         7,500 crore and that of United India 22,859 crore                     ceeded in ending the year with some
         Insurance Company Ltd (UIIC) and Ori-  The total underwriting losses of the  profitability, while out of six exclusive
         ental Insurance Company Ltd (OICL) to  insurance industry have surged by 4.4  health insurers only two have made
         Rs 5,000 crore each.               per cent to Rs 22,859 crore in 2019-  net profit during 2019-20.
         The Rs 12,450 crore capital infusion  20, compared to the previous financial  Acko General Insurance has witnessed
         approved by the Cabinet in July in-  year, according to statistics compiled  the highest combined ratio (CR) of al-
         cludes Rs 2,500 crore provided to these  by General Insurance Council.  most 210 per cent in the industry. It has
                                                                      The Insurance  Times,  December  2020
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