Page 7 - The Insurance Times June 2020

General Insurance

News

India's general insurance ance segment," Pratyusha Mekala, in- pany in India with a gross written pre-
surance analyst at GlobalData, said. mium of Rs. 14,789 crore for the year
business may grow 4% in Decline in key sectors such as auto, ended March 31, 2019. The company
the year 2020 manufacturing and construction is ex- issued over 26.5 million policies and
General insurance industry in India is pected to heavily impact insurance in- settled over 1.6 million claims as on
projected to grow 4% in 2020, com- dustry. These industries accounted for March 31, 2019.
pared with a 10% growth in the previ- more than 47% of general insurance
ous year, according to GlobalData, a premiums in 2019, said the report. PSU non-life insurers or-
London-based data and analytics com- Auto industry is facing severe slow- dered to reduce costs
pany. GlobalData revised India's insur- down due to supply chain disruptions,
ance forecast in the aftermath of the stalled production and low demand. The Central government has pre-
scribed austerity measures for PSU non-
global covid-19 outbreak. "In April 2020, automobile manufac-
life insurance companies, with the aim
As per the latest data, India's general turers registered zero sales due to the of saving 20% of costs in the current
insurance market is estimated to grow lockdown. Sales have picked up mar- fiscal year ending 31 March 2021
at a compound annual growth rate ginally in May after the lockdown re- (FY2021), in light of difficult operating
(CAGR) of 6.2% during 2019-2023. At strictions were eased by the govern- circumstances brought on by the
present, there are 25 general insurers ment; but are well below the pre- COVID-19 pandemic.
in India, excluding seven standalone COVID levels," said the report.
health insurance firms and two agricul- Department of Financial Services (DFS),
tural insurance companies. For the fis- ICICI Bank sells Rs. 2,250 has issued a letter to the 6 non-life in-
surers: New India Assurance, National
cal year 2019-20, the 25 general insur- crore stake in ICICI
ers underwrote a gross direct pre- Insurance, Oriental Insurance, United
mium of Rs. 1.64 trillion as compared Lombard India Insurance, General Insurance Cor-
to Rs. 1.5 trillion in fiscal year 2019, ICICI Bank said it has divested poration of India and Agriculture Insur-
according to a data by the Insurance 18,000,000 equity shares of face value ance Company of India, reported Indo-
Regulatory and Development Author- of Rs. 10 each of ICICI Lombard Gen- Asian News Service (IANS) citing an un-
ity of India or Irdai. eral Insurance Company Limited, rep- named industry official.
"The country-wide lockdown that resenting 3.96% of its equity share Pointing to the decline in the companies'
lasted for over two months added pres- capital at March 31, 2020, on the topline which may hit their profitability,
sure on the economy that was already stock exchange for an approximate the DFS suggests cost saving measures
showing signs of slowing down. Indian total consideration of Rs. 2,250 crore. like: cutting budget allocations for office
economy is now expected to grow at Following this stake sale, the ICICI expenses by 15%, stopping advertise-
1.63% in the financial year 2020-21, as Bank's shareholding in ICICI Lombard ments except statutory ones, as well as
compared to the pre-COVID estimate General Insurance Company Limited a ban on fresh recruitment and finan-
of 6.4%. The slowdown in the eco- stands at approximately 51.9%. cial commitments that are not provided
nomic activity will result in lower pre- ICICI Lombard GIC Ltd. is the largeest in the companies' budgets.
mium collections in the general insur- private sector general insurance com- The government has also banned for-
The Insurance Times, June 2020 7