India’s general market’s after-tax profits for fiscal year 2019 has dropped steeply to US$96 million.
This compares with US$972 million in 2018 – a decline of 90%, according to the Insurance Regulatory and Development Authority of India’s (Irdai) annual report.
The profit drop greatly affected state-owned insurers; who were hit by heavy claims from extreme weather events like the monsoon floods in the past year. Meanwhile, private sector insurers saw only a 5% profit decline.
Irdai’s report noted: “Last financial year was tough as there were heavy claims due to the floods in Kerala last year and high claims in crop insurance. Also, high claims in group health insurance business led to losses for a few public sector insurers.”
Public sector insurers saw a 47% increase in underwriting losses, while private sector players reported a 38% increase in the same.
State-owned insurer New India Assurance was the only public sector player to ring in a profit, to the tune of US$81.6 million.
According to consultancy firm EY, India by the end of 2020, should see the merger completion of three public-sector insurers of National Insurance, United India Insurance and Oriental Insurance. EY reportedly considered other alternatives for the companies’ reorganisation – including a takeover of New India Assurance, which listed on the stock exchange in 2017.

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