Chola MS General Insurance, the joint venture between the Murugappa Group and Japan's Mitsui Sumitomo Insurance Group, is anticipating a stronger performance in the second half of the current financial year (H2FY26) and the third quarter, following a decline in its net profit for the first half. The company reported a Profit After Tax (PAT) of ₹91 crore for the second quarter of FY26, compared to ₹127 crore in the same period last year. Its Gross Written Premium (GWP), however, saw a slight increase to ₹2,220 crore from ₹2,191 crore in Q2 FY25.
Market Leadership and Portfolio Strategy in Focus
In an exclusive interaction, Managing Director V. Suryanarayanan highlighted the company's dominant position in its home state of Tamil Nadu. Chola MS commands nearly a 10% market share in motor insurance for FY 2024-25, leveraging high brand recognition and an extensive network of branches, virtual offices, network hospitals, and garages. It also holds significant shares in the Fire (7.2%) and Health (5%) insurance segments. A key challenge in the state remains the high frequency of road accidents, which drives up motor third-party claims.
The company's business mix within the motor segment has evolved, with cars now constituting over half of the portfolio. Commercial vehicles contribute around 37-38%, a segment that stands to benefit from the recent reduction in GST on parts from 12% to 5%, lowering claim costs. Exposure to two-wheelers has been deliberately reduced from 17% to 11% due to stagnant third-party premiums. The industry is now optimistic about a potential positive revision in motor third-party pricing pending a government review.
Expansion Plans: Crop Insurance and Rural Penetration
After re-entering the crop insurance business, Chola MS faced a setback this year, failing to secure business due to tender-related issues. However, the company has set a clear target for the new three-year tender cycle starting in 2026-27. It aims to derive at least 10% of its top line from crop insurance, up from 6-7% this year, and plans to participate in tenders in preferred states like Maharashtra, Odisha, and West Bengal.
A major strategic focus is deepening rural distribution, aligning with national priorities to increase insurance penetration at the gram panchayat level. The company had a presence in 1,68,000 of India's 2.5 lakh gram panchayats as of March last year and expanded this to 1,90,000 by the first half of the current fiscal. Chola MS aims to cover approximately 2,20,000 panchayats, or 90% of the country, by the end of this year. This expansion is driven through multiple distribution partners and robust bancassurance tie-ups with banks like Punjab National Bank, Bank of Baroda, Union Bank of India, and Indian Bank.
Product Demand and MSME Awareness in Non-Metro Markets
In rural areas, demand is strongest for small shop insurance, dwelling insurance, two-wheeler and tractor policies, and personal accident covers. Dwelling insurance is gaining particular traction due to increased rural housing activity and bank lending. Health insurance uptake remains largely driven by state-sponsored schemes, with limited private retail penetration.
Regarding MSMEs, Suryanarayanan noted that awareness about insuring properties against disasters is improving gradually. However, coverage is often restricted to bank-financed assets, leaving promoter-funded assets vulnerable. Through its bancassurance channels, Chola MS actively encourages comprehensive asset-value coverage to protect both business owners and lenders.
On the health insurance front, post-GST changes, performance in October has been encouraging. The company believes future growth will hinge more on customer needs and product benefits rather than tax incentives. Consequently, Chola MS is focusing on sustaining retail health volumes with an emphasis on product value and sustainability, rather than aggressive expansion.
