Business prospects of the general insurance industry remained under due to the second Covid wave and its related restrictions. Business trends of May'21 in this sector have truly mirrored the sentiments of the economy. And it was duly reflected in the premium collection in May'21.
Vehicle insurance business reported declining trends on expected lines while the health sector gained prominence during the pandemic. Crop Protection business gained traction during the month as the fire insurance segment remained muted.
Muted Auto Sales Impacted Motor Premium
Motor premium collection deteriorated despite the lower base as new vehicle sales continue to remain tepid. Premium collection declined 14% YoY in May 2021 on the low base of last year. Premium collection had declined by 23% YoY in May last year.
SBI demonstrated strong growth momentum with premium growth of 35% YoY while private insurers continued to underperform. A further trend in this segment will be determined by momentum in auto sales after lockdown-related disruptions.
Increased Health Awareness
Health premiums increased 31% YoY in May 2021, helped by strong retail performance. Private players were up 43% YoY while PSU players were up 22% YoY in May 2021.
A lot of new policy initiation is on account of Covid-19, lifting the premium collection in this business. And, moderation from the current high is expected due to the waning second covid wave and faster vaccination program.
Strong Trends in Crop Protection
Crop premiums increased 17% YoY in May 2021. It was partly helped by the low base of last year. Crop premium had declined by 48% YoY in May last year. Private players reported strong 66% YoY growth while PSU players were down by 83% YoY despite the low base of 81% YoY decline in May 2020.
Muted Performance in Fire Insurance
Fire insurance premiums were muted, up 2% YoY in May 2021 because of a high base of 22% YoY growth in May 2020. The market share of PSUs increased to 47.4% in May 2021 from 35% in April 2021. Among the notable changes in this business, ICICI Lombard lost a significant market share on an MoM basis. It was down from 15.5% in April 2021 to 8.7% in May 2021.