Premiums of non-life insurers rise 18.4% in July
Non-life insurers, which include general insurers, standalone health insurers and specialised PSU insurers, registered an 18.4 per cent growth in premiums in July compared to the same period last year. They amassed premiums to the tune of Rs 17,011 crore in July 2020, compared to Rs 14,369.51 crore in July 2019. However, in April- July period, premium growth of non-life insurers was almost flat at 1.62 per cent.
General insurers, 25 in all, saw their premium rise 13 per cent to Rs 13,862 crore in July 2020, compared to Rs 12,277 crore in the same period last year, largely driven by the private insurers, whose premium collection during the same period rose 23 per cent to Rs 8,737.67 crore.
The state-owned general insurers, four in all, however, reported flat numbers with premiums to the tune of Rs 5,484.33 crore in July 2020, compared to Rs 5,478.87 crore in July 2019, up 0.09 per cent.
The biggest gainers were the standalone health insurers, 6 in all, with premiums rising more than 40 per cent to Rs 1,573.96 crore, compared to Rs 1,116.86 crore with people buying more health policies to protect themselves against any uncertainty due to the Covid-19 pandemic.
The growth has been driven by the health segment. Another reason that could be attributed to this growth is that July 2020 was the last month for investing in insurance policies and claiming deduction under Section 80D and Section 80C of the Income Tax Act, said Care Ratings in a note.
While the July premium collection showed good growth, the April – July period, however, painted a different picture.
General insurers, both private and state-owned, saw their premium collection contract 1.36 per cent to Rs 49,528.41 crore, compared to Rs 50,212.10 crore in the same period last year, owing to the lockdown in the first couple of months of the current financial year (FY21). The first quarter (Q1) of the current financial year (2020-21, or FY21) saw premiums of non-life insurers decline 4.24 per cent year-on-year (YoY).
However, standalone health insurers saw an impressive rise of 23 per cent in April-July 2020 to Rs 4,806 crore from Rs 3,908.94 crore in the same period, a year ago.
Industry experts believe, the degrowth in premiums has stopped for the industry. However, from here on, growth will be somewhat scattered. The motor segment is a problem for the industry and as long as car sales don’t pick up, there will not be any incremental premiums coming in for the industry from the segment. Moreover, last year’s business will also see some depreciation, as the age of vehicles will play a role.
