Credit rating agency ICRA has claimed that while private insurers continue to gain market share in the country, the solvency position of PSU insurers has deteriorated.
Ahead, ICRA is estimated to exceed the insurance industry’s gross direct premium 3 lakh crore by FY2025 as against 2.4 lakh crore at the end of March 2023.
As per the report, the combined ratio of private insurers is likely to improve, and return on equity (RoE) is expected to be 11.2-12.8% in FY2024 and 12.5-13.9% in FY2025.
However, most PSU insurer The ICRA report said it is expected to see a higher combined ratio, which would result in a net loss, though it would be lower than in the past few years.
It states that capital requirement of three PSUs general insurer (Except New India) estimated to be on a large scale 172-175 billion to meet the solvency of 1.50 times by March 2024, assuming 100% forbearance from the regulator.
Furthermore, the report states that the health segment is expected to witness the fastest growth, accounting for 48-50% of the incremental GDP in FY2023. Auto segment also gained momentum after covid pandemic,
ICRA said the net claims ratio improved with health claims normalising, higher claims in the motor segment partly driven by increased vehicle movement.
However, the underwriting losses of public sector insurers widened due to pay revision and payment of associated dues.
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