RoCE (Return on capital employed) has been fluctuating over the period 2012-2022 due to the following reasons:deteriorating claims ratios in Personal lines, effect of natural disasters over the past 5-6 years, effect of accumulations in individual portfolios and effect of the covid pandemic on health insurance claims especially after the second wave in 2020-21. Despite increase in Motor TP rates and rise in shareholder investment incomes, the return on capital employed measured (by Profit after tax/Capital & Free Reserves) was -3.07% in 2021-22 as compared to 9.7% in 2012-13. This reflects the competitive environment in which the Indian Non-life industry operates.

Chart 3.15.1Return on Capital Employed - 10- Year Trend

Source: Council Compilation as per source
data submitted by companies

Note: From the FY 2020-21 onwards capital & free reserves include the carry forward losses of insurance companies.