Page 7 - Insurance Times March 2021

batch of supplementary demands for The general insurance industry has PSU general insurers
grants. registered a growth of around 2.76 per continue to lose market

This included Rs. 3,000 crore for cent year-to-date up to January 2021
providing additional funds towards (10-month period from April 2020) share, merger plan stuck
recapitalisation of insurance compared to the same period last year. Public sector general insurance
The non-life industry has been growing companies continue to lose market share
companies.
by around 13-15 per cent on a year-on- to their private peers. As of January, the
The infusion will be done after the
year basis for the last couple of years. collective market share of the four PSU
supplementary demands for grants is general insurance companies stood at
passed by Parliament which will "While the growth rate is lower than 38.2 per cent, against 40.23 per cent in
the previous performance of the
reconvene on March 8. January 2019, according to the data
industry as a whole, considering what
The capital infusion will enable the released by IRDAI.
we saw in the initial stages, this is a
three public sector general insurance good turnaround. Except New India Assurance, the
companies to improve their financial others have been losing market share
and solvency position, meet the "We were initially worried that it may for some time now. However,
take two years or longer to bounce
insurance needs of the economy, compared to December 2019, United
absorb changes and enhance the back to the kind of growth rate we India Insurance has marginally gained
were experiencing earlier, but now I
capacity to raise resources and market share in January.
improve risk management. am almost confident that we should be New India Assurance continues to
close to business as usual by next year
Finance Minister Nirmala Sitharaman in terms of growth rates," said have the highest market share in the
in the Budget announced privatization Brahmajosyula at an event. general insurance space at 14.28 per
of two public sector banks and one cent, followed by United India
general insurance company in 2021-22 While fire insurance has seen a growth Insurance at 9.19 per cent, National
of around 30 per cent, health and Insurance at 7.67 per cent, and ICICI
beginning April.
liability witnessed a growth of around Lombard at 7.22 per cent.
15 per cent each. In the February 2018 Budget, the
General insurance sector
There has been a lot of interest and government had announced a plan to
may revive in Quarter 4 enquiries from customers about the merge National Insurance, United

The general insurance industry, which various new lines of business, India Insurance and Oriental
had witnessed a significant degrowth particularly on the liability side, and Insurance, and list the merged entity
in business across various segments, the industry should look to capitalise on on the stock exchanges.
including motor and health during the it. Moving forward, the industry should However, there has little progress on
first quarter of FY21, is likely to focus on product innovation and the merger since, even as the financial
turnaround and register positive enhancement. health of the firms deteriorated in
growth in the fourth quarter of this "The pandemic has focused our terms of losses, falling market share
fiscal. and poor solvency ratios.
attention on the need to innovate and
According to Subramanyam some of these learnings have become National Insurance's solvency ratio, a
Brahmajosyula, Head Underwriting & permanent part of the way we work," key measure of financial strength,
stood at 1.04 at the end of FY19,
Reinsurance, SBI General Insurance, he said.
the industry had witnessed a massive against the regulatory requirement of
While it is difficult to predict and price 1.5, according to the data.
degrowth in business during the first a pandemic like Covid, as an industry,
two to three months of the current It was 1.05 for United India in the
insurers should be better prepared for
fiscal, and most business segments second quarter (Q2) of FY20. The
a risk like this. There is also likely to be company posted pre-tax loss of Rs
other than fire, had registered a drop a higher demand for business
in growth. interruption covers and the industry, 1,091 crore in Q2FY20, according to
the data from the General Insurance
However, from Q2 there was a gradual either on its own or through Council. Oriental Insurance's solvency
uptick in demand and the industry is reinsurance solution providers, should ratio was 1.56 in Q1FY20. The
hopeful of ending the year in a "good come up with something to address company had posted net loss before
shape". this demand. tax of Rs 330 crore in Q2FY20. T

The Insurance Times, March 2021 7