According to provisional statistics released by the General Insurance Council (GIC), India’s non-life insurers recorded growth in the high teens in fiscal year 2023 (FY23) due to strong performance across sectors.
- In FY23, non-life insurers have underwritten a gross premium of Rs 2.6 crore, a 16.4% increase over FY22.
What is Underwriting?
i.Underwriting is a process by which an individual or organisation undertakes financial risk in exchange for a fee.
- Underwriters evaluate the level of risk in the business activities of insurers.
ii.By appropriately assessing investment risk, underwriting assists in setting reasonable borrowing rates for loans, establishing suitable premiums, and creating a market for securities.
Key Points:
i.The biggest year-on-year revenue growth was reported by stand-alone private health insurers, with gross underwritten premium increasing 26% from FY22 to Rs 26,242 crore in FY23.
ii.The revenue of General insurers grew 16% over FY22 to Rs 2.1 lakh crore in FY23, covering insurance for house, travel, vehicle, health, fire, and other natural or man-made disasters.
iii.Private general insurers reported 20% growth over FY22, whereas public sector insurers only saw 10% growth year-over-year.
iv.Specialized state-run non-life insurers saw an increase in revenue of 5.3% over FY22, to Rs 15,841 crore.
v.The market share of private general insurers increased among general insurers to 51.35% from 49.71%, while the market share of public-sector general insurers decreased to 32.27% from 34.03%.
- Overall, there was a modest decrease of 12 bps.
vi.Standalone private health insurers reported a 76 bps increase in market share, whilst specialised state-run non-life insurers suffered a 64 bps decrease in market share over FY22.
Performance of The Three Listed Non-Life Insurers from India in 2023:
i.ICICI Lombard General Insurance
- Revenue increased 17% year-on-year at Rs. 21,025 crore.
- In March 2023, market share was 8.18%, up from 8.14% in March 2022.
ii.The New India Assurance
- In March 2023, gross premium reached Rs. 34,487 crore, an increase of 6% from March 2022.
- Market share declined to 13.42% in March 2023 from 14.75% in March 2022.
iii.Star Health & Allied Insurance
- Gross premiums for the standalone health insurer increased 13% year-on-year to Rs. 12,951 crore.
- Compared to 5.19% in March 2022, market share slightly decreased to 5.04% in March 2023.
Market Share of PSU General Insurers Shrinks 803 bps in 5 Years: IRDAI
According to the Insurance Regulatory and Development Authority of India (IRDAI), the four public sector general insurance companies – New India Assurance Co. Ltd, United India Insurance Company Ltd, Oriental Insurance Company Ltd., and National Insurance Company Limited– have lost 803 basis points (bps) in market share to their private counterparts in the past five years.
Key Points:
i.In 2018–19, the four companies collectively held a market share of 40.04%, with New India Assurance holding a market share of 14% and United India Insurance holding a market share of 9.63%.
- However, due to the declining performance of their companies over the past five years, these state-backed companies have gradually lost market share to rivals in the private sector.
- According to the most recent data, at the end of FY23, the market share of these companies had cumulatively decreased to 32.37%, a decrease of 803 bps.
ii.New India Assurance, the top general insurer in India, saw the smallest decline in market share among the four insurers, at just 64 bps.
iii.However, the market position of the other three suffered significantly.
- National Insurance Company, based in Kolkata (West Bengal), saw the greatest loss of market share (more than 300 bps), followed by United India Insurance (276 bps) and Oriental Insurance (171 bps).
- Only New India Assurance posted a net profit of Rs 164.27 crore among the four state-owned insurers.
iv.Similarly, the solvency ratios of these three loss-making companies are significantly lower than the required solvency margin stipulated by the insurance regulator.
- The insurance regulator, IRDAI, requires insurance companies to maintain a solvency ratio of 1.5.
- But at the end of FY22, the Oriental Insurance’s solvency ratio stood at 0.15 percent, United India had a solvency ratio of 0.51 percent, and National Insurance’s was just 0.63 percent.
Premium Figures by GIC
i.According to the most recent premium data provided by the General Insurance Council (GIC), the industry saw a 16.36% growth in total direct premiums to Rs 2.57 trillion in FY23, up from Rs 2.21 trillion in FY22.
ii.The amount of premia underwritten by general insurance companies surged 16.20% to Rs 2.15 trillion, while the amount for five standalone health insurers increased 25.76% to Rs 26,242.33 crore.
iii.The premiums of New India Assurance grew by 5.87% to Rs 34,487.15 crore, the highest among the state-run companies.
- The premium for United India Insurance increased by 12.22% to Rs 17,643.32 crore.
- Oriental Insurance and National Insurance premiums increased 13.85% and 15.47%, respectively, to Rs 15,609.57 crore and Rs 15,155.76 crore.
Recent Related News:
In March 2023, New India Assurance Co Ltd, India’s largest general insurer, became the 2nd insurance company to get into the surety bonds business, which is being pushed by the Government as an alternative to bank guarantees for government procurement.
About Insurance Regulatory and Development Authority (IRDAI):
Chairperson – Debasish Panda
Headquarters – Hyderabad, Telangana
Establishment – 1999 (Incorporated on 1st April 2000)
