General insurers report 9% drop in May premium

BENGALURU: Impacted by the Covid-induced lockdown, the general insurance industry saw a 9% fall in May premium collection to Rs 11,106 crore, as compared to the same period in the previous year.

Sequentially, the fall was steeper at 21% from April’s premium of Rs 14,206 crore. But the sequential drop is not alarming, said industry experts, as March and April usually post the highest premium.

The private sector posted a steeper fall of 14.5% year-over-year in premium to Rs 6,169 crore. Public sector insurers saw nearly flat premium of Rs 4,999 crore as growth at New India Assurance (3%) and United India Insurance (10%) was offset by sales declines in National (-4%) and Oriental Insurance (-16%).

“Motor and fire are the most affected. New car sales are not happening and insurance companies that have tie-ups with OEMs have suffered. With regard to both commercial and private vehicles, we are seeing only purchases of motor third-party insurance, as its mandatory, not own damage or personal accident, as people are now looking at scaling back in this uncertain environment,” said an executive at Liberty General Insurance.

Industrial houses, SMEs and MSMEs have also chosen to postpone their purchases. “Currently many of their units are not functioning. They are not sure when or if they will restart business. So other than health, we aren’t seeing growth in any segment,” said the executive.

The private sector appears to have fared worse than public sector companies because of their high share of retail. “Private sector has a bigger share in motor and travel insurance. Auto sales have been on a decline since last year. So, in last May itself, we saw a dip, now there’s a much sharper drop,” said New India Assurance chief (underwriting, claims) Sanjay Datta.

Source: The Times of India