The general insurance trend for the month of February presents a mixed picture as the overall premium has increased 20 percent year-on-year while it’s down 22 percent on a sequential basis.
In an interaction with CNBC-TV18, Nischint Chawathe, Senior Analyst, Kotak Institutional Equities the APE performance was better than last year. “The performance for the month of February, it was better than the previous months. Private sector, overall annual premium equivalent (APE) was up around 17 percent as compared to 15 percent over the last two months. If I look at the private sector, excluding the top four players, the APE was up around 28 percent.”
For health insurance, the sector has seen a growth of 27 percent year-on-year while it’s down nine percent month-on-month. The month of February being smaller than January in the number of days, can also be one of the reasons for the premium being lower month-on-month.
“This sector (health insurance space) we are watching out for high health inflation in India and the impact that it has on these companies. Star Health and all the other players have taken large tariff hikes. So, we will have to wait and see,” Chawathe said.
The private general insurer ICICI Lombard has reported a rise of 10 bps in market share despite a fall of 5 percent in premium year-on-year and 36 percent month-on-month. Star Health has witnessed a drop of 17 bps in market share with premium rising 16 percent year-on-year while on a sequential basis, the premium has slipped one percent.
The PSU general insurance company has underperformed private insurers. New India assurance saw a fall of more than 150 bps in market share with premium rising 3 percent year-on-year and a fall of 27 percent month-on-month.
On the back of February insurance numbers, all three insurance companies have started Wednesday's trading session on a negative note. Start health and New India Assurance have slipped nearly 2 percent each while ICICI Lombard is down one percent.
Chawathe expects larger insurance players to push non-par. “The large ticket, Rs 5 lakh plus, non-par policies, the income from these policies will be taxed from next year. So you could expect some of the larger insurance companies to push these products over the last two months, which we call as a sunset period and which is the reason some of the larger players have done well.”
“The biggest event that we are watching out for HDFC or for the entire sector is, how do these companies react from next year when a part of the business, which is essentially the HNI, non-par business is something which will lose its appeal because of the fact that these policies will come under the tax law,” Chawathe added.
(Edited by : Sangam Singh)
First Published: Mar 8, 2023 10:09 AM IST
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