Equity Research April 14, 2021 BSE Sensex: 48544 ICICI Securities Limited is the author and distributor of this report Non-life insurers report strong MoM GDPI growth in Mar’21 Gross domestic premium income (GDPI) for non-life insurers grew 23% / 5.2% YoY in Mar’21 / FY21, of which, private players’ GDPI grew 32% / 8% YoY and that of Sector update their PSU counterparts grew 14% / 1.6% YoY, respectively. ICICI Lombard (ICICIGI) reported GDPI growth of 31% / 5.2% YoY in Mar’21 / FY21. SBI General (SBIGI) ICICI Lombard (BUY) outperformed with 60% YoY growth in Feb’21 (22% YoY in FY21). On MoM basis, 1,800 industry / private / PSU / ICICIGI / BAGIC / SAHI reported growth of 22% / 24% / 21% 1,600 / (-)10% / 13% / 53%, respectively. We observe the following trends in non-life insurance premium: 1) Strong FY21 growth in health premiums (Mar’21 remained 1,400 strong for SAHI), 2) rising Covid-related claims; however, they remain at 1,200 (Rs) manageable levels (claims worth US$2bn till 31st Mar’21 have been received by 1,000 insurance companies of which US$1bn has been settled); and 3) auto registrations 800 are gradually improving (passenger car, 2W, CV registrations remain around 600 250k,1100k and 50k per month).

Apr-18 Oct-18 Apr-19 Oct-19 Apr-20 Oct-20 Apr-21 Table 1: Non-life GDPI growth trend (%)

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar (%) '20 '20 '20 '20 '20 '20 '20 '20 '20 '21 '21 '21 FY21 SAHI (ex HDFC) 13.1 1.6 49.9 50.2 44.2 44.3 38.0 16.8 25.9 29.5 20.9 41.0 31.5 Lombard -9.0 -19.6 19.6 5.4 11.8 7.3 10.2 7.0 10.5 3.7 1.6 30.9 5.2

BAGIC -21.1 -21.9 -16.1 113.3 -9.1 -53.2 -5.6 13.6 22.7 -6.9 10.2 19.7 -1.6 PSU -6.3 -0.5 5.5 9.2 7.7 -5.4 -15.2 -4.4 10.7 -2.8 12.0 13.7 1.6 Ex-PSU -14.0 -14.6 9.9 25.7 12.6 -5.0 10.2 9.0 12.6 10.6 13.0 31.6 8.1 Overall -10.6 -8.8 8.0 18.3 10.4 -5.2 -0.4 3.2 11.8 6.7 12.6 23.4 5.2 Source: IRDAI. Note: SAHI – standalone health insurers, ICICIGI – ICICI Lombard; BAGIC – Bajaj General Insurance *Note: For SAHI FY-21TD GDPI we have considered ex -HDFC Ergo for all the months

Table 2: Q4 GDPI growth could have been driven through crop and health Rs bn Q3FY21 Q4FY21 QoQ growth Absolute Growth (Rs bn) Total Industry GDPI 480.0 527.9 10.0% 47.9

Outperformers SBI General 16.6 29.8 79.8% 13.2 United India 36.5 47.9 31.3% 11.4 AIC (Crop) 18.7 30.0 60.7% 11.3 Star Health 22.6 30.5 34.7% 7.8 HDFC ERGO 28.3 35.5 25.5% 7.2 Oriental 29.5 32.4 9.8% 2.9 National 34.7 36.9 6.4% 2.2 Reliance General 18.0 20.1 11.5% 2.1 Total 204.9 263.1 28.4% 58.2

Underperformers Bajaj Allianz 33.8 27.8 -18.0% -6.1 ICICI -Lombard 40.3 34.8 -13.8% -5.6 Total 74.2 62.5 -15.7% -11.6 Source: IRDAI, I-Sec Research

Table 3: Motor vehicle retail registration data: growth numbers are volatile but Research Analysts: absolute registrations improved in Mar’21 sequentially. Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Ansuman Deb (‘000) '20 '20 '20 '20 '20 '20 '20 '20 '20 '21 '21 '21 FY21 [email protected] Passenger cars 21 32 128 159 175 192 255 296 266 273 246 274 2316 +91 22 6637 7312 YoY (%) -91% -86% -37% -23% -7% 10% -6% 7% 23% -6% 9% 31% -15% Ravin Kurwa 2W 319 161 795 886 888 1012 1059 1442 1413 1141 1069 1182 11366 [email protected] YoY (%) -76% -89% -41% -37% -30% -13% -26% -20% 11% -10% -18% -36% -32% +91 22 2277 7653 CV 20 2 12 21 27 40 47 52 51 54 56 64 446 YoY (%) -75% -98% -82% -71% -58% -35% -48% -31% -19% -31% -35% -46% -52.2% Source: Vahan

Please refer to important disclosures at the end of this report

General Insurance, April 14, 2021 ICICI Securities

Covid claim amount rose by US$209mn in Aug’20, US$374mn in Sep’20, US$305mn in Oct’20, US$249mn in Nov’20, US$312mn in Dec’20, ~US$169mn in Jan’21, ~US$112mn in Feb’20 and US$125mn in Mar’21.

Chart 1: Pace of incremental Covid claims has started Chart 2: ..so has the claim amount. rising… Claim amount (US$mn) No. of claims No of Claims settled 1,200 2,500 909 997 Settlement amount (US$mn) 1,000 1,858 1,984 2,000 800 1,500 600 400 1,000

Thousands 200 500 - - 2-Jul-20 5-Oct-20 8-Jun-20 4-Jan-21 6-Feb-21 1-Sep-20 1-Dec-20 31-Jul-20 2-Jul-20 30-Oct-20 5-Oct-20 25-Jun-20 11-Jan-21 22-Jan-21 8-Jun-20 4-Jan-21 31-Mar-21 25-Feb-21 6-Feb-21 13-Nov-20 14-Aug-20 10-Sep-20 17-Sep-20 29-Sep-20 1-Dec-20 1-Sep-20 31-Jul-20 30-Oct-20 25-Jun-20 11-Jan-21 22-Jan-21 25-Feb-21 31-Mar-21 14-Aug-20 10-Sep-20 29-Sep-20 13-Nov-20

Source: Media reports, I-Sec Research Source: Media reports, I-Sec Research

Table 4: SBI general segmental GDPI trend Crop and health Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 remained the key Total GDPI 1,013 520 611 530 1,316 757 contributor to SBI Motor 152 208 199 224 242 305 General in Q4FY21- Health 66 69 61 73 319 109 Fire 110 113 115 115 140 117 TD Crop 574 20 136 15 500 101 Others 112 109 99 104 115 126 Source: General Insurance council, I-Sec Research

Table 5: United Insurance segmental GDPI trend Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Health remains the Total GDPI 1,633 1,347 1,056 1,247 2,094 1,188 key contributor to Motor 515 561 495 557 537 549 United Insurance in Health 630 470 191 314 1,145 336 Fire 102 118 77 130 144 112 Q4FY21-TD Crop 238 0 164 105 95 70 Others 148 198 130 141 173 121 Source: General Insurance council, I-Sec Research

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General Insurance, April 14, 2021 ICICI Securities

Table 6: Non-life insurers’ GDPI S. No. Insurer Rs mn Rs mn Market share Mar’21 YoY FY21 YoY FY21 (%) 1 Acko General Insurance Limited 0.6 102.4 4.2 13.2 0.2 2 Bajaj Allianz General Insurance 8.7 19.7 125.7 -1.6 6.3 3 Bharti AXA General Insurance 2.5 8.0 31.6 0.8 1.6 4 Cholamandalam MS General Insurance 4.5 22.8 44.0 0.0 2.2 5 NAVI General Insurance Limited 0.1 28.8 1.0 -33.9 0.1 6 Edelweiss General Insurance 0.2 98.0 2.2 49.3 0.1 7 Future Generali India Insurance 4.5 51.2 38.4 12.2 1.9 8 Go Digit General Insurance Limited 3.3 98.0 24.2 36.8 1.2 9 HDFC Ergo General insurance 14.0 19.5 123.0 3.9 6.2 10 ICICI Lombard General Insurance 9.7 30.9 140.0 5.2 7.0 11 IFFCO Tokio General Insurance 7.0 13.2 84.1 5.7 4.2 12 Kotak Mahindra General Insurance 0.6 47.8 5.4 25.5 0.3 13 Liberty General Insurance Limited 1.2 14.8 14.5 -5.6 0.7 14 Magma HDI General Insurance 1.2 41.3 12.8 4.8 0.6 15 National Insurance 15.7 -4.4 141.8 -7.1 7.1 16 Raheja QBE General Insurance 0.4 33.9 2.7 72.2 0.1 17 Reliance General Insurance 8.0 67.5 83.1 11.3 4.2 18 Royal Sundaram General Insurance 2.7 10.9 28.2 -23.0 1.4 19 SBI General Insurance 9.1 59.6 82.6 21.6 4.2 20 Shriram General Insurance 2.1 -15.1 21.4 -13.3 1.1 21 Tata AIG General Insurance 6.4 22.0 80.4 8.9 4.0 22 The 24.6 22.3 284.8 6.2 14.3 23 The Oriental Insurance 11.4 -17.0 124.5 -8.9 6.3 24 United India Insurance 15.1 -11.5 167.1 -4.6 8.4 25 Universal Sompo General Insurance 3.1 21.8 30.5 6.8 1.5 General Insurers Total 156.8 14.6 1,698.4 2.0 85.5 26 Aditya Birla Health Insurance 1.8 68.9 13.0 49.1 0.7 27 HDFC Ergo Health Insurance - - - - - 28 ManipalCigna Health Insurance 1.0 61.7 7.6 31.1 0.4 29 Health Insurance 2.5 60.3 17.5 40.9 0.9 30 Limited 3.2 42.2 25.6 7.1 1.3 31 Star Health & Allied Insurance 13.4 34.0 93.5 36.2 4.7 32 Reliance Health Insurance Limited* - - - - - Stand-alone Pvt Health Insurers 21.9 41.4 157.2 31.5 7.9 33 Agricultural Insurance Company of India Limited 12.8 286.9 121.1 29.4 6.1 34 ECGC Limited 1.5 109.1 10.6 -1.2 0.5 Specialized PSU Insurers 14.3 254.3 131.7 26.2 6.6 GRAND TOTAL 193.0 23.4 1,987.3 5.2 100.0 Source: IRDAI Note: For SAHI FY-21TD GDPI we have considered HDFC Ergo Health Insurance GDPI in the calculation and have adjusted HDFC Ergo General insurance GDPI accordingly.

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General Insurance, April 14, 2021 ICICI Securities

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New I-Sec investment ratings (All ratings and target price refers to 12-month performance horizon, unless mentioned otherwise) BUY: >15% return; ADD: 5% to 15% return; HOLD: Negative 5% to Positive 5% return; REDUCE: Negative 5% to Negative 15% return; SELL: < negative 15% return

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