While the state-run non-life insurance companies’ profitability may remain muted over the medium term, private insurers in the non-life insurance space are expected to report a return on equity of 13%-14% during the period, according to CareEdge.
“Driven by the improvement in the loss-ratio along with the rising yield on debt investments, the overall profitability is expected to improve for the (non-life insurance) sector. Expense ratio is expected to remain range bound in the near-term. However, the new regulations and the economies of scale kicking in, we expect it to improve in the long-run. Overall private insurers are expected to report return on equity of around 13-14%, while the private insurers profitability is expected to remain muted,” the rating agency said during a webinar– “Non-Life Insurance- Ready to Take-Off” on Tuesday.
