IGI Logo

Motor premium growth softens, health outperforms in Jan’21

Jan’21 witnessed a slowdown in GDPI due to motor segment. Motor GDPI growth slowed down to 4% YoY in Jan’21 vs 14% YoY growth seen in Dec’21. Health GDPI grew 21% YoY in Jan’21. SAHI continued to outperform as its GDPI grew 30% YoY vs 25% in Dec’20. ICICIGI/BAGIC health GDPI changed -12%/+18% YoY in Jan’21. Non-life insurance space will be driven by (1) expected recovery in motor premiums, (2) expected price hike in motor TP in FY22, (3) moderating Covid claims (US$169mn in Jan’21 compared to US$312mn in Dec’20) and (4) strong outlook for health premiums (SAHI has grown by 32% in FY21TD).

Standout trends in January and FY21TD have been a slow improving motor premium, strong growth in health premiums and reducing Covid claims. ICICIGI’s health premium has declined as principal bancassurance partner (ICICI Bank) is focusing less on sale of credit-linked attachment products. Additional trends will be slowly moderating premium growth in fire segment as price hikes enter the base and relative outperformance of retail over group segment in health (FY21-TD, retail / group health GDPI is up 29% / 6% YoY). ICICIGI continues to have strong ~11% market share in motor package sales compared to its overall ex-crop market share of 9% as of FY21-TD. Ex-crop market share of ICICIGI plus Bharti Axa stood at 10% as of January 2021.

* ICICI Lombard (ICICIGI) witnesses moderation in motor segment, which is inline with industry. Health segment continues to be in red. FY21-TD, ICICIGI has registered +4.3% GDPI (ex-crop) growth till Jan’21 compared to industry growth of +5.7% YoY. For the month of Jan’21, GDPI (ex-crop) grew 4% YoY.

* Motor premium: Total motor premiums for ICICIGI changed by +3.6%/+2.3% YoY in Jan’21/FY21-TD compared to industry change of +3.8% /-4.6%. Overall motor share has improved from 9.8% in FY20 to 11% in FY21TD.

* Motor package: There has been a change in disclosure from the month of Nov’20 in terms of motor GDPI segment. New disclosures are given in three types; ‘pure motor OD’, ‘pure motor TP’ and ‘motor package (OD + TP)’. ICICIGI market share in motor package segment stood at 11% in FY21-TD. ICICIGI’s mix of package in the overall motor segment stood at 88% vs industry mix of 82% as on FY21-TD.

* Health premiums for ICICIGI declined by 12%/5% YoY in Jan’21/FY21-TD compared to industry growth of 21%/14.6%. Within health, retail/group GDPI changed +25% / -12% YoY in FY21TD. o Fire premium grew 17%/14 for ICICIGI in Jan’21 YoY.

* BAGIC reported a decline of 7% in the overall GDPI due to lower crop; ex-crop GDPI was up 6% in Jan'21: FY21-TD, BAGIC’s GDPI (ex-crop) declined 6% YoY.

* Motor premium: BAGIC’s overall motor GDPI changed +4.7% / -14% YoY in Jan’21 / FY21-TD. BAGIC’s total motor market share declined to 7% in FY21-TD compared to 7.6% in FY20.

* Motor package: In terms of motor package, market share stood at 6.9% in FY21- TD and mix of motor package stood 81% in FY21-TD.

* Health premium: Health GDPI has changed +18% / -6% YoY in Jan’21 / FY21- TD. Group GDPI declined 14% YoY while retail grew 18% YoY in FY21-TD.

* Covid claim was US$209mn in Aug’20, US$374mn in Sep’20, US$305mn in Oct’20, US$249mn in Nov’20, US$312 in Dec’20 and US$169 in Jan’21 – signalling a sign of moderation.

To Read Complete Report & Disclaimer Click Here

For More ICICI Securities Disclaimer https://www.icicisecurities.com/AboutUs.aspx?About=7

Above views are of the author and not of the website kindly read disclaimer