The non-life insurance industry is expected to log negative growth this financial year (FY21) due to Covid-19 pandemic, according to a top official of Cholamandalam MS General Insurance Company, here on Tuesday.
Announcing retirement from the Mugugappa Group insurance firm, S.S. Gopalarathnam said V. Suryanarayanan, President & COO, would take over as the Managing Director on July 1.
The company is a joint venture between the Rs 381 billion turnover Murugappa Group and Mitsui Sumitomo Insurance Group, Japan.
Gopalarathnam said the non-life insurance industry would suffer degrowth in the first quarter of FY21. The second quarter business figures might be flat compared with Q2FY20. The industry could start logging growth from the third quarter, but overall there might be zero growth or two per cent negative growth for FY21, he added.
For Cholamandalam MS General, the business degrowth during Q1FY21 was about 14 per cent, he said.
According to him, the rural demand for two-wheelers will give a necessary push to the automobile insurance business. An increase in demand for two-wheelers has resulted in better business for the non-life insurers.
The Insurance Regulatory and Development Authority of India too recently tweaked the norms for long-term policies, resulting in lower premium outgo for new vehicle buyers.
On crop insurance, he said the business was expected to go down to about Rs 12,000 crore this year from Rs 27,000 earlier due to change in the scheme.
Gopalarathnam ruled out any fresh capital infusion in the current financial year.