PSU general insurers trim offices in smaller cities
Public sector general insurers are bolstering their physical presence in tier-1 cities while closing down offices in smaller cities and towns. Their presence in tier-II cities and beyond has come down to 32 per cent share of offices of all general and health insurers from 36 per cent in a years' time.
Public sector general insurers closed a total of 578 offices in smaller cities in the last financial year. As many as 360 offices in tier-III cities were shut. The count of offices in all the smaller cities and towns, except tier-VI, cities came down. Tier-VI cities got 38 new offices. Still, only about one per cent of general insurance offices are in tier-VI locations.
Private general insurers and standalone health insurers opened 85 new offices in cities beyond tier-I. However, private general insurers have very limited presence in cities beyond tier-II. In tier-III cities they have 32 offices but only 14 offices in tier- IV and V cities. Standalone health insurers do not have a presence beyond tier-IV cities.
Data from the Insurance Regulatory and Development Authority shows 138 districts in India do not have any offices of general insurers or standalone health insurers. No wonder, non-life insurance penetration in India stands at an abysmally low 0.94 per cent.
Tier-I cities, meanwhile, got an increased share of offices at 68 per cent in FY20 from 64 per cent in FY19. Tier-1 cities have 7,796 offices of general and health insurers, of which 367 were added in FY20.
Public sector general insurers added 34 new offices in tier-1 cities in FY20, private general insurers added 164 offices and standalone health insurers 169 offices.
Specialised insurers like Export Credit Guarantee Corporation and Agricultural Insurance Company, which have offices only in tier 1 cities, added none.
Despite these additions, both public and private general insurers were operating 11,394 offices in FY20 as against 11,578 offices in FY19 all over the country—a decrease by 184 offices.