The organization of the Yearbook 2019-20 continues to focus on different aspects of the Indian Non-Life Insurance Industry via each chapter. There are sections covering Macro-economic and Insurance Indicators, State-wise penetration and density, Industry Business Highlights, Segment wise Business Highlights, and Customer Service. The Yearbook includes data tables and information on the working of Non-life Insurance companies in the annexures.
The Yearbook has been developed with sources of data available within the GI Council, Non-life Insurance Industry players and the Regulator. Economic data has been sourced from RBI and various government sources. Relevant data has also been collated from Annual reports and public disclosures of member companies and reports routed through the Council. Complaints data for the year 2019-20 has been obtained from IRDAI for the chapter on Service indicators.
Analysis of the performance of players since 2010-11 reveals that the Non-Life Insurance Insurers have maintained steady growth and solvency margins. The industry has maintained positive profit after tax figures for the year in continuation with the trend since 2011-12.Market competition has dominated all classes other than Motor TP since April 2008.
The Yearbook also highlights the status of Non-life Insurance penetration in the country in the form of heat maps and gives claims data state-wise. The heat maps show a panoramic view of how the Non-Life Insurance penetration has improved during the last 10 years.
The segment wise analysis in this yearbook looks at business from different angles. Every chapter also carries a short summary of the highlights of the analysis under that section.
Comparison of Key parameters between 2010-11 and 2019-20:
Macro-economic and Insurance indicators:
- Insurance penetration (in percentage) at current prices has increased from 0.62 in 2010-11 to 0.93 in 2019-20
- Insurance density has increased almost close to four-fold from 398 to 1,516
Changes in the Insurance Industry players:
- The number of insurers offering general and health insurance is 34 in the current year, which is the same as the previous year
- The opening of the market for reinsurers, has seen the establishment of the India branch of the Lloyds syndicate as well as branches of nine other foreign reinsurers.
Industry Growth and Capital Leverage:
- Gross Direct Premium Income (GDPI) in India has increased from ₹48,213 Crores in 2010-11 to ₹1,88,916 Crores in 2019-20
- Capital employed has increased from ₹20,027 Crores to in 2010-11 to ₹77,420 Crores in 2019-20, while Investments have increased more than seven-fold from ₹42,163 Crores in 2010-11 to ₹2,90,005 Crores in 2019-20
Operational Parameters (2010-11 versus 2019-20)
- Number of offices has increased from 6,594 to 11,375
- Number of employees has grown from 93,347 to 141,631
- Number of policies issued increased from 9.16 Crores to 24.16 Crores
- Overall net retention ratio remained constant at 66.7%
- Number of claims handled has increased to 5.3 Crores in the year 2019-20
- Motor Insurance business (comprising of both Own Damage and Third Party covers) accounts for the highest share of GDPI at 36.5% followed by health and accident insurance at 30.1% and property insurance business at 9.7%. It is pertinent to know that the health and accident segment has grown at a CAGR of 18.2% over the period 2010-11 to 2019-20.
- The Non-Life Insurance Industry has incurred underwriting losses since 2007. Underwriting losses increased substantially in 2018-19 due to deteriorating claims ratios across product lines except for Health Insurance and an increase in Expenses of Management. Underwriting losses further increased for the year 2019-20.
- Motor TP administered rates continue to be inadequate due to, increasing number of Motor accident victims, the severity of injuries, and increase in compensation awards by Courts.
- The number of customer complaints has come down by almost one-third from 1,26,658 in 2010-11 to 49,988 in 2019-20. Customer complaints in absolute terms have declined by over 77% in the last decade.
- Relative measure of complaints to a number of policies issued has come down from 0.14% in 2010-11 to 0.02% in 2019-20
- Insurance Intermediaries (i.e. Individual Agents, Corporate Agents, Bancassurance, Brokers) have contributed around 63% market share of the business
In conclusion, the Non-Life Insurance industry continues to show maturity and resilience over the last 10 years despite facing many operational challenges, since the removal of tariffs. The industry players are well poised to take advantage of the favorable business climate emerging from various Government initiatives to tap the huge untapped potential in the Indian markets in the years to come.