RoCE (Return on capital employed) has been fluctuating over the period 2014-2024 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. 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) is 10.2% in 2023-24 as compared to 9.6% in 2014-15. However, the ratio has improved substantially as compared to the previous year due to better performance by the industry including PSU insurance companies.

Chart 3.16.1Return 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.