‘Pvt sector insurance players to capture higher mkt share’

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Private general insurance players will continue to capture market share at the expense of public enterprises its a mix of aggressive distribution and service. Having penetrated the corporate segment in the past, most private insurers now seek to grow their retail books, says a report on Moody’s -ICRA global insurance.

Furthermore, the number of private insurers is expected to grow as various foreign companies have announced intentions to establish joint ventures.

Given the low level of penetration in some segments, this trend towards foreign participation is likely to continue, informed the report.

According to the report, rate deductions in the recently de-tariffed corporate portfolio (fire & engineering) will impact premium growth, but this outcome will be offset by greater sales of existing and new products.

The formation of a third-party motor pool, where all general insurers are required to participate based on the size of their overall market shares, will reduce the underwriting burden on public entities. The claim ratio for the segment is likely to improve in the medium term as premium rates for the third party motor pool have also climbed.

Although, public entities have sustained consistent underwriting losses on some product lines, in particular for third-party motor business, their investment income and gains have more than offset their underwriting losses and helped them achieve solvency margins.

On challenges for the domestic general insurance industry the report said premium rates will remain under pressure due to intense competition on the more profitable lines.