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ICICI Lombard Expert Blog
 

Investments by General Insurance Companies on the Rise

September 21 2017
Insurance

The Indian non-life insurance industry is riding on good times. For the 2015-16 fiscal year, the total direct premium collected was ₹96,379 crore. This represents an increase of 13.81% over the premium of ₹84,686 crore collected the previous year.

Following this healthy growth boosted by sectors such as motor and health, general insurance companies have increased their investments drastically. According to data from Insurance Regulatory and Development Authority of India (IRDAI), investments till March 2016 from non-life insurance companies stood at ₹1,88,126 crore.

This figure represents an enormous jump of 128% when compared to the ₹82,520 crore that was invested in the same month of 2011. For the most part, insurers have been pumping these investments into government securities. Though general insurers are mandated to invest around 30% of their premium into government securities, most of them have been investing more than what is required.

Till the data of March 2016, 27% of investments were made in central government securities whereas, around 12% was put into other approved and state-government securities. The investment is likely to go further upwards, thanks in part to the premium collected due to crop insurance and also due to the capital raised by issuance of IPOs by several public sector general insurance companies.

Health and motor insurance continue to be the main driver for the general insurance business. Motor insurance continues to lead with a share of 43.89% in 2015-16, while health insurance counts among the fastest growing segments with a growth rate of 21.30% YOY.

Source: Business Standard

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