For the first time since de-tarrifing kicked in in 2008, public sector general insurers have been outflanked by their private sector rivals.
The market share in terms of gross premium underwritten for public non-life insurers declined by almost 5% to 58.3%, while private ones gained around 41.7% in March this year.
The market share of private players rose 170 basis points (bps) to 42.9% last fiscal, while the four state-owned general insurers gained just 15%, collecting a total Rs 39,427 crore in premiums.
“Public sector insurers want to bring down their combined loss ratio and the focus has been in that direction. We are currently cautious about underwriting losses and sticking to the practice of stable underwriting and careful about the book-building,” said a senior official of a public sector general insurer. He did not want to be named.
Among nationalised majors, New India Assurance and National Insurance gained marginally, while United India Insurance and Oriental Insurance shed 4.7% and 1.5%, respectively, in market share.
“The impact of de-tariffing seems to have neutralised and the business stabilised. Going ahead, private general insurers will be focusing more on profitability. Some of the players are venturing more into commercial lines of business too. We are following a balanced outlook by building the books carefully,” said Mukesh Kumar, head- strategy planning, HDFC Ergo General Insurance.
Data collated by JM Financial show, among the private biggies Tata AIG and Bajaj Allianz outperformed other private counterparts. Tata AIG’s business grew 63% during the last fiscal, while Bajaj Allianz retested 34% growth in the same period.
The general insurance industry as a whole posted 15% growth last fiscal.
After the direction from the finance ministry early this year to stem their losses, public sector insurers have been refraining from loss-making portfolios like group health policies.
Public sector insurers have also revised their prices, rationalising the regime.
“More than growth, we need to make the business consistent and stay away from loss-making business. Strict underwriting practices will be followed to achieve our objective,” the public sector official said.
According to private non-life players, profitability will be the core focus. Growth at a certain cost will not be given preference. Doing away with third-party motor pool last fiscal helped them cut down losses incurred on third-party policies.
Private players are hopeful of maintaining the profitability with the revision in third-party premium upwards as per the standard formula.
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