Edelweiss General Insurance is looking to break even in a little over four years from now as it doesn’t expect to see any material change in its breakeven path due to the pandemic.
“I think most companies are taking about eight to nine years to break even…We expect we will be able to deliver breakeven as per the expectations of the industry and our shareholders,” Shanai Ghosh, executive director and CEO, told FE.
According to Ghosh, there has been both good and bad parts of the pandemic for general insurance companies. While the health insurance business saw good growth for at least a year, the motor insurance growth took a hit in the last two years. “So on balance, I think it has been kind of even-out and so we don’t expect any significant negative impact of Covid definitely to our trajectory,” she said, adding due to the pandemic, the company’s growth has been impacted “positively” because of people’s acceptance of digital insurance and digital players.
Also Read: Assets seized or detained? Know the remedies available under Sections 129 and 130 of the CGST Act
A general insurance company’s breakeven, she said, is dependent on multiple things such as product mix, timing of the premium and loss ratios for different products, among others. “So as of now, we don’t expect to see any material change in our breakeven path. We were hit by Covid claims in one year, but that has kind of gone out now,” Ghosh pointed out.
For the insurer, about 50-60% of its premium comes from motor and about 30-35% from health. “This is pretty evenly poised. I would expect motor to continue to be around in the 50% range, while health to be around 35% to 40%,” the CEO said. The company also has products under fire insurance.
The general insurer started operations in February 2018.
Edelweiss General Insurance is scaling up its retail health segment. The company said group health insurance has been the fastest growing category in the last two-three years for the industry.
The insurer posted a 59.62% year-on-year growth at Rs 348.88 crore in its gross direct premium underwritten for the last financial year. “So, last year we grew at around 60%, and we are expecting to continue to grow at a really, really robust pace,” Ghosh added.