Regulatory concerns key hurdle as pvt general insurance players gain share

The May 2024 data for the general insurance industry revealed some clear trends. The gross direct premium income (GDPI) grew 14.9 per cent YoY overall in May-24, largely driven by the health segment (up 17.3 per cent YoY) while motor growth did well even as it decelerated to 12.6 per cent growth.

The retail health GDPI grew at 19.1 per cent YoY while group health growth dipped to 11.2 per cent. The crop insurance (which is tender driven) and government health segments grew by 38 per cent and 440 per cent YoY.

In May’24, the Fire segment reported muted YoY growth of 4.2% YoY.

The implementation of Ind-AS 117 and its assumptions on liability and other insurance-related changes in regulations could be a future cause of concern.

Standalone health insurers and private multi-line (different risk exposures in a single agreement) players gained market share versus PSUs.

Motor GDPI growth moderated to 12.6 per cent YoY from 18.3 per cent YoY in Apr-24 but Q1 promises to be strong. There was an uptick of 13.9 per cent YoY in the motor owner driven (OD) segment (versus 23.6 per cent YoY in Apr-24). Private insurers’ GDPI grew 15.4 per cent YoY while public insurers’ GDPI increased just 5.7 per cent YoY in Apr-24.

The health segment registered GDPI growth of 17.3 per cent YoY and this was driven by retail (up 19.1 per cent YoY) and the government segment (up 440 per cent YoY). Growth in group segment moderated to 11.2 per cent YoY in May-24 (versus 24.2 per cent YoY in Apr-24).

Government business during May was underwritten by PSU insurers—United India Insurance and National Insurance. The crop segment is tender-driven and seasonal and GDPI grew 38 per cent YoY.

In company-specific terms Bajaj Allianz (BAGIC) had GDPI underperformance due to growth moderation in the motor segment including a third party (TP) contraction of minus 6.2 per cent YoY. BAGIC’s retail health segment also underperformed with 11.2 per cent YoY growth while group GDPI growth was good at 47 per cent YoY.

ICICI General Insurance (ICICI Lombard) outperformed in motor and health as GDPI for motor OD and TP grew 33.1 per cent and 24.3 per cent respectively while group health grew 23.8 per cent YoY in May-24.

Retail health growth is lower than industry at 11.8 per cent.

Star Health May-24 retail health GDPI growth came in at 14.8 per cent YoY, underperforming the industry. Total health GDPI grew 16.6 per cent YoY due to 37.3 per cent rise in group health.

Go Digit’s motor GDPI grew 8 per cent YoY as motor OD increased 23.8 per cent YoY while motor TP GDPI contracted 0.8 per cent YoY.

Personal accident GDPI soared 10 times YoY. Group health GDPI contracted 28.5 per cent YoY while retail health GDPI grew 24.9 per cent YoY.

Aditya Birla Health saw growth of 62 per cent and 23 per cent YoY in the Retail and Group health segments respectively.

During the month, PSU players reported a growth of 7 per cent YoY (lower than industry growth) whereas private multi-line players outperformed and reported a gross written premium (GWP) growth of 16 per cent YoY. In Group Health, PSUs underperformed on account of 13 per cent YoY decline in New India.

In Motor, private multi-line players also outperformed the industry in both OD segment (up 18 per cent YoY) and the Motor TP segment (up 13 per cent YoY). ICICI Lombard reported growth of 33 per cent and 24 per cent YoY in the OD and TP segment respectively. Acko General posted a strong 34 per cent and 29 per cent YoY growth in Motor OD and Motor TP respectively.