In the current testing times, when almost all sector are facing the brunt from the COVID-19 impact, one sector that can probably help investors to protect their capital is insurance sector.
This optimism stems from the strong growth reported by insurers such as ICICI General Insurance, New India Assurance, Baja Allianze General Insurance, etc in their gross direct premium income (GDPI) – the higher net premium earned means higher earnings for the insurer.
According to insurance sector data, the multi-line general insurers have reported a stronger Feb-20/FY20TD GDPI of Rs 121.7 billion/ Ra 1.5 trillion (+11.5/12.2% YoY).
Private sector multi-line insurers’ Feb-20/FY20TD GDPI growth improved to Rs 67.0 billion/ Rs 844.7 billion (+11.3/14.8% YoY), while PSU multi line insurers reported Rs 54.7 billion / Ra 663.4 billion(+11.8/9.0% YoY).
Among the segment, property and healthcare reported robust Feb-20/FY20TD growth at Rs 58.8 billion/ 37.5% YoY to Rs 10.9 billion/ Rs 147.2 billion. Growth in property has been driven by the recent rate hikes mandated by GIC RE.
Motor insurance segment witnessed 2.7% YoY decline as competition continues to be fierce.
Sharp decline was seen for stat-run insurers (-11.1% YoY) led by huge fall in premiums for National (-42.5% YoY).
Bajaj Allianze, ICICI General Insurance, New India Assurance reported -8.6/+12.7/-1.4% YoY growth.
Acko and Go-digit continue to grow at a fast clip as premiums grew 33.7/69.5% YoY. Growth for private insurance players is higher at 8.7% YoY.
Growth for Motor TP segment deteriorated to just 7.3% YoY (Jan-20: 18.3% YoY) as new vehicle sales slowed. Newer players such as Acko/Go-digit/SBI continue to grow ahead of market at 96.7/67.1/564.9% YoY.
Health segment continues to grow at a rapid pace- growth in Feb-20/FY20TD was 41.5/16.8% YoY.
ICICI General Insurances GDPI (ex-crop) increased 13.3% YoY to Rs 10.4bn. Growth momentum (ex crop) improved from -2.0/12% YoY seen in Dec-19/Jan-20. Health and Motor OD business reported growth (ahead of industry) of 12.4% and 12.7% respectively. FY20TD GDPI for ICICIGI stands at Rs 125.7 billion(-7.5% YoY), with ex-crop GDPI is healthy at Rs 121.7 billion(+13.9% YoY).
New India Assurance Company’s GDPI grew to Rs 19.3bn, +24.2% YoY (ex. crop at Rs 18.6bn, +26.0% YoY) led by growth primarily in health business. Growth in retail business segments such as motor TP/health improved moderately to 20.7/30.3% YoY.
Bajaj AllianzGDPI slipped by 1.4% YoY in Feb-20 to Rs 7.0bn, (ex-crop GDPI at Rs 6.6bn +1.6% YoY) led by sharp decline in crop business (-32.2% YoY). Motor OD GDPI declined 8.6% YoY vs. industry decline of 2.7% YoY. FY20TD GDPI for BAGIC stands at Rs 120.5bn (+20.1% YoY), while GDPI (ex-crop) is Rs 89.4bn (9.2% YoY).
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