Chola MS General Insurance has indicated that the company is reaching close to pre-Covid-19 levels in two-wheeler insurance business, even as the overall general insurance industry is staring at a phase of decline in the near term.

Over the last two to three weeks, sales of two-wheelers have seen an increase, driven mainly by rural demand. Chola’s two-wheeler insurance business has also seen traction, and is reaching close to pre-Covid-19 levels, V Suryanarayanan, President & Chief Operating Officer of the company told BusinessLine during an interaction here.

In two-wheelers, the rural-centric motorcycle segment has seen a revival in demand and sales of bikes are gradually moving northwards, while the scooter segment is still impacted as most of the urban centres are under lockdown.

“Two-wheeler industry demand recovery has surprised OEMs and dealers alike. Preferences for personal vehicles over the use of public transport in the current crisis and high disposable incomes in the rural market owing to a good harvest, among others, have helped revive demand for two-wheelers. Inquiries reaching pre-Covid-19 levels have provided some comfort regarding demand sustainability,” according to analysts of Motilal Oswal Securities.

The two-wheeler segment accounts for about 10 per cent of the overall motor portfolio (about ₹3,200 crore) of Chola MS and the company expects a significant increase in two-wheeler business this year.

Tractors shine

The company is also seeing brighter opportunities for the sale of insurance products in the tractor segment in the near term due to growth in tractor sales helped by a good Rabi harvest, sound reservoir levels, and forecast for normal rain.

While two-wheelers and tractors promise bright prospects in the retail business, the company’s health insurance business continues to see strong momentum. Its recently-launched two products ― Covid-19 cover (group scheme) and Arogya Sanjeevani ― have been well-received on the back of growing awareness for health insurance products.

“Our Covid-19 product has taken off well and we would have covered about 2.5 lakh lives through this scheme. During this quarter alone, we hope to generate a premium of ₹25-30 crore from the Covid-19 cover scheme,” said Suryanarayanan.

Replying on crop insurance, SS Gopalarathnam, Managing Director of the company said the crop insurance business has undergone some changes and the overall pie would come down to ₹10,000-12,000 crore this year from ₹27,000-28,000 crore earlier. Several players, including Chola MS, have come out the crop insurance business,” he said.

While Chola expects improvements from Q3 of this fiscal, it is likely to report about 20 per cent decline in its overall business for the June 2020 quarter due to the lockdown and the resultant impact, while the industry’s decline is estimated at 15-16 per cent for the said period.

Meanwhile, Gopalarathnam will be retiring as the Managing Director on June 30 and Suryanarayanan, currently President and Chief Operating Officer, will take over as the Managing Director of the company effective July 1, 2020.

Published on July 1, 2020