Monthly Insurance Sector Update by ICICI Securities

Non-life insurance premiums were impacted due to the Covid-19 lockdown. Aggregate industry gross direct premium income (GDPI) (ex-crop) stood at Rs140bn down 8.5% YoY. ICICI Lombard's (ICICIGI) GDPI (ex-crop) declined 9% largely in line with industry. Industry weakness is expected to continue due to economic slowdown - barring the health segment where increased awareness would generate strong traction.

Based on the retention rates (NWP/GDPI) of Q4FY20, the NWP decline of ICICIGI would be ~23% in April 2020. Industry ex-crop GDPI declined 8.5% in Apr'20 led by sharp fall in Motor premiums.

Motor 'own damage' (OD) and third party (TP) premium income declined 51% YoY and 48% respectively. Health segment reported a growth of 6% in Apr20 led by strong growth reported by New India (29% YoY), United India (61% YoY), Oriental (17%) and Star Health (15%). Fall in motor TP and health premium growth in Apr'20 will be due to extensions provided by government towards policy renewals. Fire segment continued to report strong GDPI growth of 41% in Apr'20 due to price hikes. Crop insurance witnessed a sharp decline of 64% YoY in Apr'20.

Source: Investment Guru India