Only 1 of 22 non-life insurers makes underwriting profits

MUMBAI: The insurance regulator's proposal to force companies to list might have come at an inopportune time for non-life companies. As many as 21out of the 22 non-life insurers continue to lose money in the main insurance business. Bajaj Allianz General Insurance has emerged as the only non-life company to make underwriting profits among the 22.

The JV between Bajaj Finserv and German insurer Allianz also tops the list of private insurers in terms of net profits with post-tax earnings of Rs 564 crore. It also ranks No. 2 in terms of premium income and has the highest return on equity at 20.2%.

Typically, companies make underwriting losses as they cut rates to grow business. But Bajaj Allianz has turned out to be an outlier. “In the last five years, we have grown our premium at a compounded annual growth rate of 65%. This shows that there is no trade-off between growth and underwriting profits,“ said Tapan Singhel, MD & CEO, Bajaj Allianz.



To improve governance, the Insurance Regulatory and Development Authority of India ( IRDAI) has proposed mandatory listing for insurance companies after a decade of operations. There are 16 life in surers, 12 non-life companies, one health insurer and two specialised insurance companies which have been around for more than a decade.

While companies have reached maturity , underwriting profits are yet to emerge for most of them. The high level of underwriting losses could be a damper for investors, although companies report net profits because of the investment income earned from their reserves.