General Insurers Premium Income Grows 19.4% in May

Gross direct premium income of general insurance companies grew 19.4% year-on-year in May, with private players continuing to report higher growth compared with their public sector peers, data from the General Insurance Council showed.

In May, the general insurance industry saw gross premium income at Rs.8,267.45 crore, against Rs.6,923.96 crore in May last year. Private insurers’ gross premium income stood at Rs.3,510.24 crore, up by 22% compared with the year-ago period. Public sector companies witnessed a Y-o-Y growth of 17.2% at Rs.4,250.99 crore in May. In the last few months, private players continued to perform better than public sector insurers. Market participants say despite profits made by public sector general insurers, their high combined ratio might spoil valuations if they plan to list.

“If we look at the performance of public sector insurers, many of them are having an underwriting losses and their combined ratio is weak compared to private players. But currently, no private general insurance companies have announced their desire to list on the stocks exchanges. If we look at public sector players, they are trying to bring underwriting losses down and even improve their combined ratio,” said a top insurance player. The combined ratio (expense ratio plus loss ratio) indicates a product’s profitability, and the ratio over 100% means it is not profitable.

Senior officials in the industry say on an average the combined ratio for private insurers is at 110%, while for a few public sector insurance companies, it is 115% or even more. However, private insurers believe that they have worked hard to bring down underwriting losses and it is not only about high combined ratio.