Public sector general insurers have been steadily losing ground to the private insurers overall and more so in the bread and butter motor segment, with pie crimping to 32.6 per cent in August, down from 36.6 percent a year ago.
As against this, the private sector has improved their market pie to 67.4 per cent in the reporting month from 63.4 per cent in the same period last year, shows an analysis of the monthly data by Care Ratings.
That the decline is so stark for the public sector players is clear from the FY18 market share number when they held 46.5 per cent of the total motor segment premia, while private players had only 53.5 per cent then.
Come FY19, the respective share declined to 40.7 per cent for the public sector while jumped to 59.3 per cent for the private players. The share of public sector players declined to 36.8 per cent in FY20 and further dropped to 34.2 per cent in FY21 while that of private players rose to 63.2 per cent in FY20 and further accelerated to 65.8 per cent in FY21, according to Care report.
Similarly, in FY18, the public sector had a market share of 37.5 per cent of the motor OD (own damage) market, and the private players had it 62.5 per cent, which declined and increased respectively to 32.5 per cent and 67.5 per cent in FY19 and further to 28.3 per cent and 71.7 per cent, respectively in FY20.
In FY 21 the respective shares were 25.5 per cent and 74.5 per cent. In August 2020 the pie was 27.8 per cent and 72.2 per cent and which further declined to 24.3 per cent and 75.7 per cent respectively.
Its only in motor TP (third-party) segment that the public sector have some leeway as they had a market share of 52.7 per cent as against private players' 46.3 per cent in FY18, but within a year they lost that too.
In FY19 it declined to 46.5 per cent and to 42.2 per cent in FY20 while for private players the pie increased to 53.5 per cent in FY19 and to 57.8 per cent in FY20.
In the last fiscal, the share of public players was at 39.7 per cent and private players at 60.3 per cent. In August 2021, this is at a low of 38.3 per cent for the public sector, down from 42.3 per cent in August 2020, as against private players' 61.7 per cent and 57.7 per cent.
This downtrend is particularly important for the public sector player as the motor TP segment has emerged as the larger segment driving the overall motor insurance growth.
According to industry data, there were over 23.12 crore vehicles on road in the country as of March 2019, of which 57 per cent were uninsured vehicles. Two-wheelers were the largest component of the uninsured vehicles with over 60 per cent of them being uninsured, whereas uninsured cars were only 10 per cent, showing massive potential for growth.
In FY21, motor premium had declined after the pandemic but retained the top spot which it has ceded in FY22 to the health segment. This is also in line with the international market, where health is significantly larger than the motor segment. Motor TP segment has continued to grow faster than the Motor OD segment.
Amongst the states, Maharashtra continues to occupy the top spot followed by Tamil Nadu, Karnataka, and Uttar Pradesh in motor business for insurers.
The report expects motor insurance premia to grow at 6-8 per cent driven by any increase in TP rates, and auto sales for the full year, despite the chip shortage.