PSU general insurers’ market share decreases

The four public sector general insurance companies have lost 800 basis points (bps) in market share in last five years to their private counterparts. In 2018-19, the four had a cumulative market share of 40.04 per cent, with New India Assurance having a market share of 14 per cent and United India Insurance with a market share of 9.63 per cent. But, gradually in the past five years, these state-backed firms have lost their market share to private sector players, due to the declining health of their business.

The latest data shows that at the end of FY23, the market share of these firms cumulatively declined to 32.37 per cent — a drop of 803 bps.

Among the four insurers, New India Assurance witnessed a marginal fall in its market share, of just 64 bps, and maintained its position as the country’s leading general insurer. The other three, however, witnessed a considerable erosion in their market standing. Kolkata-based National Insurance Company saw the most erosion in market share of over 300 bps, followed by United India Insurance (276 bps), and Oriental Insurance (171 bps).

Except for New India Assurance, the state-owned general insurance firms suffered huge losses and have seen a depletion in their solvency margin, leaving limited room to focus on growth.

According to FY22 disclosures, Oriental Insurance suffered a net loss of Rs 3,104 crore; United India Insurance’s loss was to the tune of Rs 2,135 crore and National Insurance Company’s losses mounted to Rs 1,664 crore. Among the four state-owned insurers, only New India Assurance reported a net profit of Rs 164.27 crore.

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