Covid-19 impact: Motor, health segments see decline in March premiums

The Covid-19 disruption and the subsequent lockdown had a significant impact on non-life insurance industry’s premiums for March.
 

The motor and health segments led the decline in premiums for the industry as the month saw premium fall by 9 per cent. While motor segment saw a 7 per cent decline in premiums, health registered an 11 per cent decline in premiums.

Credit insurance segment’s premiums declined 42 per cent while premiums in the personal accident segment witnessed 53 per cent decline. The industry, however, registered 12 per cent growth in premiums with motor and health segments showing marginal increase in premium collection.

According to ICICI securities, industry weakness is expected to continue due to economic slowdown, barring the health segment where increased awareness would generate strong traction. It said non-life industry could go through an inverted V-shaped earnings profile due to low claim ratio during the lockdown, but will eventually face low premium growth in line with the economy amidst a hypercompetitive environment, which would strain FY22 earnings.