General insurance industry grew 16 per cent to Rs 12,206 crore in April in terms of gross written premium (GWP) collection. In April last year, GWP stood at Rs 10, 500 crore. The industry saw a higher growth of 30 per cent in terms of GWP during fiscal 2017, according to Irdai data.
However, the April figure doesn’t include the crop insurance segment that drove growth in the general insurance industry by adding almost Rs 18,000 crore in FY17. Crop insurance for the current fiscal will start shortly with kharif sowing.
In a first, the private sector general insurance (GI) companies have overtaken their state-owned peers in terms of GWP market share in April. During the month, the four PSU GI companies’ (GWP) grew only 5.42 per cent to Rs 5,904 crore, while their peers in the private sector expanded by 27.88 per cent to Rs 6,302 crore, the data showed.
“In the month of April, the private sector players have grown at 27.88 per cent and four PSU general insurers registered a growth of 5.42 per cent (without standalone health and mono line insurers). “The difference has been mainly in agriculture business, where the private players have shown an increase of more than Rs 400 crore while it has been hardly anything for PSUs,” Sanath Kumar, chairman and managing director, National Insurance Company said.
“This could be mainly due to some adjustment/accounting entries and cannot be seen as a trend. Further, there has not been any increase in April renewals of mega risks with PSU insurers,” he said. “PSU insurers’ growth would pick up in the coming months,” Kumar.
The PSU general insurers continued to have more than 50 per cent of market share (53.21%) until fiscal 2017 as against 46.79 per cent for their private peers. Commenting on the higher growth recorded by the private players, United India Insurance’s acting CMD AV Girija Kumar said one month data is not sufficient to make any annual projection.
After the increase in the third party motor premium since April 1, the industry, as a whole, has recorded the highest growth in the portfolio, a 23 per cent rise in total premium to Rs 1,888 crore. The health portfolio went up by 9 per cent, from Rs 3,277 crore to Rs 3,568 crore. However, there has been degrowth in aviation and marine portfolios in the month, the Irdai data said.
Four PSU general insurance companies were formed in 1970s after merging over 100 firms in existence then. The four state-owned companies are New India, National, United and Oriental. Private sector GI companies came into existence after the sector was opened in 2001. At present, there are 18 GI firms in the private sector.
Asked about the private players over taking their PSU peers in terms of GWP market share last month, Bajaj Allianz General Insurance MD and CEO Tapan Singhel said the spike was because of growth in agriculture business. Pushan Mahapatra, managing director and chief executive of SBI General, said “April has been a very good month for us across channels, including corporate.”