RoCE (Return on capital employed) has been fluctuating over the period 2015-2025 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 no increase in Motor TP rates since last 3 years and effect of higher claims outgo on Motor & Health, the return on capital employed measured (by Profit after tax/Capital & Free Reserves) was 10.7% in 2024-25 as compared to 9.6% in 2023-24. This reflects the efficient utilization of capital in the Indian Non-life industry.

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.