The general insurance industry reported its highest-ever year-on-year growth of 32% in premium collection in FY17 because of crop insurance. And in July, for the first time, private sector non-life insurance companies moved ahead of the four state-owned companies in premium collection.
In FY17, private sector general insurers reported smart growth of 35%, driven by crop insurance as they had 73% share in crop insurance business. The government’s focus to improve acreage under insurance will continue to drive volumes. State-owned companies reported lower growth of 24.5%. Motor insurance remains the largest segment with 44% market share, followed by health and personal accident cover.
However, despite strong demographic profile, the penetration of general insurance is still abysmally low at 0.72% of GDP. In terms of profitability, private insurance companies have lower claims ratio than state-owned companies.
As part of the government’s plans to list non-life insurers in which it holds stakes, New India Assurance Company Ltd has filed the prospectus for its initial public offering (IPO). The share sale of New India Assurance will see a total stake dilution of 14.56%, according to the draft red herring prospectus. Similarly, National Insurance Company will also go for public offering. The country’s only state-owned reinsurer GIC filed its draft documents to raise over Rs 10,000 crore through an IPO. In private sector, ICICI Lombard General Insurance will also go public.