Non-Life Insurance Premiums witnessed a decline of 10.6% in April 2020

As expected, monthly gross direct premium for April 2020 witnessed a fall of 10.6 per cent to Rs 14,209 crore from Rs 15,892 crore in April 2019. The decline in premium was mainly due to decline in monthly premiums of General Insurance companies by 11.3 per cent (vs. an increase of 13.5 per cent in April 2019).

Story: Shivani Sharma
Design: Pragati Srivastava

The Fire segment grew by 41 per cent, mainly due to increase in reinsurance rates by GIC in March 2019 and January 2020. This was however, lower than the 51.5 per cent growth demonstrated in April 2019. These policies are subscribed by businesses and generally run on a financial year basis and are renewed in April every year.

The marine segment saw a downfall of 15.5 per cent in premium collections in April 2020 from same month last year. It witnessed a growth of 12 per cent in FY19.

The Motor insurance segment has witnessed a significant decline as not many vehicles were sold in April 2020.

The health segment has grown by 6.2 per cent, however, since it is the largest segment in April 2020, its growth along with the fire segment saved the entire non-life insurance premium from being a washout. The growth was 16.2 per cent last year.

While private sector players recorded a steeper decline of 16.18 per cent in monthly premium collection, their public sector counterparts posted a 5.68 per cent fall. Aviation insurance premium collection was down by 6 per cent in April 2020 from previous year in the same month.

Due to the lockdown, all segments barring fire, health and liability showed a decline in their monthly premium numbers. The P.A insurance segment premium collections recorded a downfall of 17 per cent Y-0-Y in April.

The insurance business is expected to witness muted growth in the first quarter of FY21 due to the extended lockdown, however the pandemic could cause an increased interest in the health segment. Further, due to the lockdown the claims may be lower, thereby having lower impact on the combined ratio of the non-life companies.