The entry of recent gamers within the listing of the highest 10 motor insurers in India has modified the aggressive dynamics of the nation’s associated insurance coverage trade, mentioned knowledge and analytics firm GlobalData.

The new gamers undertake expertise to enhance buyer expertise and acquire market share.

GlobalData’s insurance coverage database revealed that the market share when it comes to premiums held by the highest 10 insurers decreased from 78.3% in 2018 to 71.2% within the monetary yr finished 31 March 2023 (FY2023). The shift may be attributed to the underperformance of main public sector insurers and aggressive methods adopted by non-public insurers comparable to ICICI Lombard, Tata AIG and Go Digit. As a outcome, premiums of public sector insurers, excluding New India Assurance, declined throughout 2018-22.

Technology

GlobalData senior insurance coverage analyst Swarup Sahoo mentioned, “Investments in technology to optimise operational efficiency and enhance customer experience, as well as strategic focus on product lines leading to new product developments, have supported private insurers to perform well compared to public insurers.”

Although New India Assurance retained its main place as of March 2023, ICICI Lombard is catching up and would possibly grow to be the main motor insurer the next yr. Similarly, Tata AIG elevated its market share by 2.2 share factors in FY2023 and moved to the third place as in comparison with the seventh place in 2018.

Private insurers comparable to HDFC Ergo and Go Digit have moved up within the rating, whereas Oriental Insurance, which occupied the sixth place in 2018, didn’t characteristic among the many high 10 insurers in FY2023. The development is anticipated to proceed.

Mr Sahoo mentioned, “Leveraging technologies has been one of the major drivers of growth for private insurers. Implementation of machine learning, artificial intelligence (AI) and automated claims processing tools has enabled private motor insurers to improve market positioning, transform underwriting and significantly reduce the average time to settle a claim. This has resulted in a higher claims settlement ratio, making [private insurers] trustworthy among consumers.”

An evaluation of common insurers’ investments in expertise indicated that Go Digit invested an 80% share of its complete expertise expenditure on motor insurance coverage, adopted by Tata AIG with 58% and ICICI Lombard with 56% in FY 2023. This helped in strengthening the premium progress of those firms, as Go Digit registered 38.2% progress for FY2023 as in comparison with FY2022, adopted by Tata AIG with 23.9% and ICICI Lombard with 8.9% progress.

Mr Sahoo mentioned, “Motor insurers are additionally leveraging expertise to boost buyer expertise, which has grow to be a sport changer. Digital coverage issuance and declare settlement not solely guarantee a seamless buyer expertise but in addition streamline the general course of. Similarly, AI-powered chatbots present a personalised buyer expertise, particularly in claims administration, renewal and buyer grievances, which supplies non-public insurers an edge over public insurers.

“Private insurers are strategically focusing on product lines and enhancing product offerings, which have also supported growth. For example, ICICI Lombard has strategically focused on commercial motor insurance, considering the investments in infrastructure and real estate market.”

Personalisation

Insurers are additionally specializing in personalisation and product enhancements to cater to completely different buyer preferences. The new usage-based insurance coverage fashions comparable to pay the way you drive (PHYD) and pay as you drive (PAYD) present a novel and personalised expertise. Insurers targeted on evolving client wants pushed by rising electrical automobile (EV) gross sales and creating merchandise appropriate for EVs will additional strengthen associated positions available in the market.

Mr Sahoo mentioned, “Private insurers will need to grab opportunities presented by new technologies and continue expanding product offerings to remain competitive. Streamlining claim settlements, enhancing the customer experience and personalisation will support private insurers in establishing dominance in the Indian motor insurance industry over the next five years.”