Motor premium driven by 11% growth In TP

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.