General insurance premiums witness flat growth in June
Chennai: General insurance companies slowed down in June as premium growth in crop, motor, fire and health remained muted.
General Insurance premiums were flat in June 2019 at Rs 12,936 crore against Rs 12,970 crore in the same month last year. In April and May, premiums had grown by 14-16 per cent. While private general insurance players saw a growth of 7 per cent, PSU general insurers witnessed their premiums marginally down by 1 per cent.
Specialised PSU insurers—Agricultural Insurance Company and ECGC—witnessed a massive decline of 79 per cent in premium to Rs 141 crore against Rs 689 crore in June 2018.
Slowdown in some of the large segments pulled down the overall premiums. Premium in crop business was down by 45 per cent. Private players who accounted for about 60 per cent of the crop business, were down 42 per cent, though PSUs were up 144 per cent. “Most business in the first three months is a spillover of the Rabi season and hence may not be an accurate representation. However, most large private players are anyway cautious in this segment and will go slow in FY2020,” finds Kotak Institutional Equities.
High growth in fire premium finally moderated down to 29 per cent from 51-61 per cent over the past two months. Weak economic activity slowed down the momentum of the first two months. Shriram General and Royal Sundaram reported a decline as compared to high growth in the past two months.
Motor business remained muted with 4 per cent growth, mainly due to 5 per cent decline in Motor OD. ICICI Lombard saw a muted growth and SBI GI continued to report a decline.
Even at 11 per cent, growth in health too was muted compared to 16-28 per cent growth in the past two months. Growth in group health, a segment that has recently been strong for large private players, moderated to 13 per cent from 21-42 per cent over the past two months. Within health business, specialized players continued to gain market share with 31 per cent growth, while general insurers were up 6 per cent. PSU general insurers were flat.