MUMBAI: Low automobile sales and disruptions in crop premium collections meant that general insurers’ premium income remained subdued for the second straight month in May even as segments such as health and fire insurance showed encouraging signs of revival for players, insurance regulator’s monthly data showed.
The premium collection for non-life insurers dropped 9% in May and 10% for the two months of the fiscal, largely on the back of a 23% decline in the motor premiums and 48% decline in crop premiums collected by the industry in May, data from IRDAI showed.
However, the graded reopening of economy and growing awareness among customers about health insurance meant that the medical insurance recorded a 9% growth in gross premiums collected in May while liability insurance grew 10% in the reported month against corresponding period last year. Fire insurance also recorded a 22% growth in premium collection in May.
“This was likely driven by higher corporate renewals compared to retail businesses as underlying borrowers focus on cash conservation,” as per a Kotak Securities report. “Additionally, General Insurance Council had increased property reinsurance rates in March 2019.”
For the sector, excluding motor and crop, premiums were up 5% yoy, as per an ICICI Securities report.
The revival in health insurance was largely led by improved collections reported by public sector players. While New India Assurance, country’s largest state-owned general insurer, saw their health premium collection grow 24% year-on-year, United India and Star Health saw premium income increase by 62% and 23% respectively in May against last year.
“The sharp decline in premiums for private players was led by steep decline in motor premiums,” as per the Kotak report. “While PSU players reported similar decline in motor premiums, sharp spike in government scheme related health premium led to flat growth.”
For standalone health insurers the growth in retail health premiums was 34% in May against last year. Meanwhile, private non-life players ICICI Lombard, SBI General and Bajaj Allianz recorded weak business in the month with premium incomes excluding crop declining 13%, 5% and 20% respectively as the motor insurance portfolios continued to suffer losses.
Source: ET Markets