Crop Insurance Expected to Contribute 10% to Top Line Revenue
Chola MS General Insurance, a joint venture between the Murugappa Group and Japan’s Mitsui Sumitomo Insurance Group, is optimistic about its performance in the second half of the fiscal year 2026, despite reporting a decline in profit after tax (PAT) during the first half. The company recorded a gross written premium of ₹2,220 crore in the second quarter of FY26, a slight increase from ₹2,191 crore in the same period last year. However, its PAT fell to ₹91 crore from ₹127 crore. Managing Director V. Suryanarayanan shared insights on the company’s market position, prospects in crop insurance, and rural distribution expansion.
Strong Market Presence in Tamil Nadu
Chola MS General Insurance boasts a robust presence in Tamil Nadu, where it enjoys high brand recognition. The company has established an extensive network of physical branches, virtual offices, hospitals, and garages across the state. In the motor insurance segment, Chola MS holds nearly a 10 percent market share for the fiscal year 2024-25, making it a leading player. Additionally, the company has significant stakes in the Fire and Health insurance sectors, with market shares of 7.2 percent and 5 percent, respectively. However, the high rate of road accidents in Tamil Nadu poses challenges, leading to increased third-party claims in motor insurance.
Impact of GST Rate Cuts
The recent reduction in Goods and Services Tax (GST) rates is expected to benefit insurers, particularly in the commercial vehicle segment. The GST on parts has been lowered from 12% to 5%, which will help reduce claim costs for reimbursement claims. With commercial vehicles making up approximately 37-38% of Chola MS’s motor portfolio, the company is poised to gain from this change. The business mix has evolved, with cars now representing more than half of the motor portfolio, while the contribution from commercial vehicles stands at around 37 percent. The company has consciously reduced its exposure to two-wheelers from 17 percent to 11 percent due to stagnant motor third-party premiums.
Future Outlook for Crop Insurance
Chola MS’s crop insurance business faced challenges this year, as the company did not secure any crop business due to tender-related issues. However, a new three-year tender cycle is set to begin in 2026-27, and the company aims to derive at least 10 percent of its revenue from crop insurance, up from the current 6-7 percent. Chola MS plans to participate in tenders in key states such as Maharashtra, Odisha, and West Bengal, focusing on preferred clusters to enhance its market presence in this sector.
Expanding Rural Distribution and Awareness
The company is committed to increasing its rural penetration, aligning with government initiatives to enhance insurance coverage at the gram panchayat level. As of March, Chola MS had a presence in 168,000 of India’s 250,000 gram panchayats, which expanded to 190,000 by the first half of this fiscal year. The goal is to reach approximately 220,000 panchayats by year-end, covering around 90 percent of the country. In rural areas, demand is primarily for small shop insurance, dwelling insurance, two-wheeler and tractor policies, and personal accident cover. Health insurance uptake is largely driven by state schemes, but there is a growing interest in dwelling insurance due to increased rural housing activity and bank lending.
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