Mo­tor premium driven by 11% growth In TP

Banking Frontiers - - Research Notes - Insurance -

The gen­eral in­sur­ance in­dus­try re­ported mod­er­ate premium growth of 16% in May 2019 (15% YTD). Mo­tor in­sur­ance was weak at 8% while premium for the month was up 8% yoy, bet­ter than 1% in April 2019. This this was driven by 11% growth in mo­tor TP, ac­cord­ing to Ko­tak In­sti­tu­tional Eq­ui­ties’ re­port on gen­eral in­sur­ance.

Mo­tor OD (Own Dam­age) is weak. Mo­tor OD seg­ment re­ported 4% growth in premium, versus a 5% de­cline in April 2019 (flat in FY2019). While pri­vate play­ers were up 13%, PSUs were down 12% yoy. Digit and Chola up 27%, ICICI Lom­bard, up 17%, Reliance, up 24% and Uni­ver­sal Sampo up 38% and most of them ben­e­fit­ting from a lower base and in­creas­ing fran­chise with

deal­ers. On the other hand Ba­jaj Al­lianz up 4% and SBI Gen­eral down 15% in­di­cated re­strained busi­ness due to de­clin­ing prof­itabil­ity in this seg­ment.

Mo­tor Third Party has been some­what bet­ter. Growth in mo­tor TP premium was some­what bet­ter at 11% yoy. While PSUs were down 5%, pri­vate play­ers were strong at 28% yoy, gain­ing mar­ket share by 750 bps to 55%. Ba­jaj Al­lianz was up 18% yoy, largely fo­cus­ing on CV (38% of to­tal mo­tor premium). Higher growths among other play­ers - Chola at 29%, ICICI Lom­bard at 20% track their growth in the OD seg­ment, re­flect­ing com­pre­hen­sive in­sur­ance plans. IRDA raised TP tar­iffs in the last week of May.

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