FY22: Pvt insurers acquire market share, well being high portfolio

Coming out of the stress created by the Covid-19 pandemic, the domestic general insurance industry — led by state-owned New India Assurance (NIA) — has ended FY22 with a premium of Rs 2.20 lakh crore, up 11 per cent over Rs 1.98 lakh crore premium mobilized in FY21.

However, the latest Insurance Regulatory and Development Authority of India (Irdai) data shows that private players are fast gaining market share and catching up with four public sector players which hitherto dominated the sector. Thanks to the pandemic and stagnant motor third party premium for the last two years, in FY22, health portfolio has toppled the motor business to become the largest segment in the industry for the first time in the history of Indian general insurance industry.

The total health premium of the industry has risen by 26 per cent to Rs 66.167 crore (Rs 52,689 crore in the year ago) till February 2022 while total motor premium (own damage and motor third party motor premium) has expanded only by 3.62 per cent to Rs 63,052 crore (Rs 60,851 crore a year ago) during the period.

Crop insurance premium, which has fallen by 5 per cent to Rs 26,654 crore till February 2022, is still the third largest portfolio of the Indian general insurance industry. While NIA raised its market share to 14.76 per cent (14.33 per cent in FY21), all four main line general insurers — NIA, National Insurance, United India Insurance (UII), Oriental Insurance and National Insurance — lost 212 basis points of their market share to private players and have a total share of 34 per cent as of FY22-end. Five standalone private health insurance companies, led by Star Health & Allied Insurance Company, saw a 32.53 per cent rise in gross direct premium income in FY22 to Rs 20,880.08 crore against Rs 15,755.18 crore a year ago.

For the first time, private player ICICI Lombard General Insurance, with a premium of Rs 17,976 crore emerged India’s second largest general insurer. ICICI Lombard, with a market share of 8.15 per cent, had acquired Bharti Axa General Insurer in 2020-21 that helped it capture the second analyst position in the industry,s said.

PSU general insurers, like Chennai-based UII with a premium of Rs 15,780 crore in 2021-22 (Rs 16,704 crore in 2020-21) and Delhi-based Oriental Insurance with a premium of Rs 13,700 crore (Rs 12,449 crore a year ago) , have retained their third and fourth positions, respectively. However, Pune-based Bajaj Allianz General Insurance, with a premium of Rs 13,688 crore in 2021-22 (Rs 12,569 crore in FY21) is fast catching up with Oriental Insurance. Another private insurer HDFC Ergo General Insurance, with a premium of Rs 13,500 crore (Rs 12,569 crore in 2020-21), is also advancing rapidly.

Analysts point out that with three of the public sector general insurers, UII, National Insurance (with a premium of Rs 13,123 crore in FY22 against Rs 14,140 crore a year ago) and Oriental Insurance trimming their topline growth to be profitable, the general insurance industry will see a bit of churn in rankings with more private sector players occupying top five positions in one or two years. NIA, the largest Indian general insurer with operations in 27 countries, has closed the fiscal with a domestic premium of Rs 32,569 crore as against Rs 28,548 crore in FY21.

Together with its overseas premium, NIA may end the fiscal with Rs 36,000 crore of total premium. According to insurance regulator Irdai, 24 general insurance companies (excluding health and agri insurers) registered an 8.79 per cent increase in their combined gross direct premium during 2021-22 at Rs 1,84,775.17 crore against Rs 1,69,844.68 crore in the previous fiscal.

The two specialized PSU insurers — Agricultural Insurance Company of India Ltd and ECGC Ltd — posted a 14.22 per cent rise in their collective gross premium to Rs 14,979.47 crore compared to Rs 13,114.85 crore in FY21.

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