Page 8 - Insurance Times December 2020
P. 8

the demerged company i.e. Bharti and  motor insurance was Rs 7,183.5 crore  Mantri Fasal Bima Yojana (PMFBY) this
         AXA will be allotted equity shares of  in October, compared with Rs 6,954.1  rabi season, as none of the insurance
         the combined entity of Rs. 10 each  crore in the same month last year, a  companies have filed bids to imple-
         with  Bharti  shareholders  receiving  growth of 3%. Motor insurance, which  ment the scheme in these areas.
         18.23 million shares and AXA receiving  has two segments - motor own dam-  Work to implement  both  weather-
         17.52 million shares.              age (OD) and motor third party (TP),  based insurance as well as PMFBY for
                                            also saw growth in October.
         At present, Bharti Enterprises owns                                   the 2019-20 rabi season has been de-
         51% in Bharti AXA General, while its  Gross direct premium for motor TP was  layed due to lack of bids, said senior
         France-based JV partner AXA has 49%.  Rs 4,306.4 crore in October, up 4%  officials of the state Agriculture de-
         ICICI Lombard is a  listed insurance  compared  with Rs 4,139.4  crore in  partment. The first few tenders failed
         firm, and Bharti and AXA will be public  October last year. Premiums for motor  to get the required number of bids and
         shareholders in the combined entity  OD went up by 2% to Rs 2,877 crore  they had to be refloated. Heavy under-
         after the deal.                    in the month under review.         writing losses and political interference
                                                                               are the main reasons the scheme has
         The proposed merged non-life insur-  "Robust festive demand and a gradual  become nonviable, said sources in in-
         ance company is expected to earn a  rise in freight volumes and utilization  surance companies.
         total annual premium of at least Rs.  rates supported premiums. Motor pre-
         16,447 crore on a combined basis with  miums have gradually improved from  The state Agriculture department has
         market share of around 8.7%, said the  trough levels observed in April and May  divided the 32 rabi districts of the
         two companies in a joint media re-  and will likely improve further," said  state in six clusters and invited tenders
         lease.                             the Kotak report.                  for the implementation of PMFBY in all
                                                                               of them. The first tender was floated
         "This is a landmark step in the journey  Health insurance also saw surge in pre-  on September 9 but failed to get the
         of ICICI Lombard and we are confident  miums in October. Gross direct premi-  required number of bids for each clus-
         that this transaction would be value  ums for health insurance stood at Rs  ter. In the second tender process, no
         accretive for our shareholders. We are  4,074.8 crore, against Rs 3,840.6 crore  bids were received for 15 districts, and
         excited  by  the  capabilities  and  in the year-ago period, growing by 6%.  the tender had to be floated for these
         strengths that Bharti AXA will add to  Retail health saw surge in premiums by  clusters again in November. However,
         our  franchise,"  Bhargav  Dasgupta,  30% to Rs 1,982.6 crore. In the last  10  districts,  including  Beed  and
         MD & CEO of ICICI Lombard General  few months, the pace of growth in  Solapur, have not received any bids for
         Insurance said earlier.            retail health has slowed down, market  implementation of the scheme.
                                            players said.
         Non-life  insurance  pre-          "A slowdown in growth in retail health  The PMFBY is a flagship programme of
                                                                               the central government, under which
                                            was likely an interplay of slowdown in
         mium falls to Rs. 15,855           daily new Covid cases  in India and  both the state and central govern-
         crore in October                   lower volumes during the festive sea-  ments pay most of the premium, while
                                                                               the farmer has to pay only 1.5-2 per
         General insurers reported gross direct  son. Standalone health insurers re-  cent of it. The low premium rates and
                                            ported a 32% Y-o-Y increase in health
         premium of Rs 15,855.11 crore in Oc-  premiums, led by a 43% Y-o-Y increase  assured compensation in case of crop
         tober, down 0.42% year-on-year. How-  in the retail health business," said the  loss  has  prompted  farmers  in
         ever, motor insurance, which was go-  report from Kotak Institutional Equi-  Maharahastra to  participate in the
         ing through a challenging period in the  ties.                        scheme in large numbers.
         last few months due to the fall in new                                For the financial year 2018-19 , 1.39
         vehicles sales, saw premiums pick up in                               crore  farmers  had  opted  for  the
         October. The pace of the growth in  Farmers in Maharashtra            scheme and the total premium col-
         health insurance slowed due to the fall opt out of rabi crop cover    lected was Rs 4,778.3 crore. Due to
         in group health premiums.          Farmers  across  10  districts  of  the drought last year, the companies
         Data from Kotak Institutional Equities  Maharashtra may not be able to avail  had paid  out  Rs  3,730.52  crore  to
         show that gross direct premium for  crop  insurance  under  the  Pradhan  54.46 lakh farmers.
                                                                      The Insurance  Times,  December  2020
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