Crop and fire remain strong

Crop retains strong momentum, with premium up 38% yoy during September 2019, versus 27% growth in YTD 2020. Most of the growth during September was delivered by PSU and private players while AIC was down 12% yoy. Bajaj Allianz, SBI General, Reliance General and HDFC Ergo delivered strong growth. ICICI Lombard continues to reduce focus in this segment, according to Kotak Institutional Equities Research report.

Premium growth in fire insurance remained strong in September 2019 at 37% yoy, although weaker than YTD 2020 runrate of 46% yoy. Almost all players delivered strong growth. ICICI Lombard was up 42% yoy, SBI was up 37% while Magma (down 4% yoy) and DHFL (down 81% yoy) were the only weak players. Notably, GIC has increased reinsurance rates (average rise of 2X) in eight occupancies (comprising 35% of industry volumes), which will likely drive higher volumes and profitability in FY2020E.

Private players were up 37% yoy, YTD runrate of 21% yoy. Excluding crop insurance, private players were up 27% yoy, higher than 15-26% yoy growth observed over AprilAugust 2019. PSU general insurers reported 35% yoy growth in September 2019 on the back of strong growth in crop insurance. 21% yoy growth in health insurance was driven by robust momentum across specialized insurers at 22% yoy and 28% yoy growth for private players.

Among private players, Acko and Go Digit continue to grow rapidly, although on a low base. SBI General (up 88% yoy, driven by crop business) was the best performer among the bigger players. ICICI Lombard’s focused segment growth remains strong even as crop business pulls down overall premium. Bajaj GI reported 1.4X yoy growth on the back of 11X yoy growth in the crop insurance business. For Chola MS, motor segment is strong, health revives; overall ex-crop steady. Strong business momentum for SBI continues, led by crop.