HYDERABAD: General insurance companies saw over 10 per cent decline in premiums earned during the month of April. The contraction is for the second consecutive month, but it may be noted that April’s decline was largely due to the COVID-19 lockdown.
To mitigate hardships for policyholders, the government allowed delayed payments of renewal premiums until May 15 for health, motor vehicle and other policies. Moreover, due to the lockdown, insurers could add few new customers, perhaps barring health cover where there was some traction.
During April, companies’ premium collection fell by 10.6 per cent to Rs 14,206 crore in April 2020 from Rs 15,891 crore in the same month a year ago. While private insurers saw a steeper decline of 16.18 per cent in monthly premium collections, public sector companies saw premiums decline by 5.68 per cent. In absolute numbers, private insurers earned Rs 6,722 crore premium in April, while State-run insurers’ premium collection stood at Rs 6,559 crore.
Within private players, Bajaj Allianz saw the sharpest drop at 21 per cent, followed by HDFC Ergo at 16 per cent, ICICI Lombard at 9 per cent and Reliance General by 8 per cent. However, some players like Go Digit Insurance, Future Generali and Universal Sompo registered positive growth in April.
On the other hand, public sector insurers saw a mixed performance. The largest State-owned general insurer, New India Assurance, bucked the trend by registering a positive growth of 7 per cent. But its peers National Insurance and Oriental Insurance saw premium collections decline, while United India Insurance recorded a flat growth.
Meanwhile, the seven standalone health insurers reported 7 per cent growth in premium collections at Rs 888 crore from Rs 831 crore last year. In contrast, specialised public sector insurers saw premiums decline by 57 per cent to Rs 36.74 crore from Rs 85.27 crore.
Lastly, in what could be a relief to insurers, non-Covid claims fell by a staggering 40 per cent including the motor segment, which saw a significant drop in claims as fewer vehicles plied on roads.
Lockdown effect
Rs 14,206 cr worth premium collected by public and private insurance companies in April 2020, against Rs 15,891 crore in the same month last year