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Mumbai , Aug. 27

THE domestic non-life insurance industry is expected to remain under pressure until the companies drastically change their underwriting and investment strategies, Crisil has said based on a study.

According to Crisil, the non-life insurance industry has witnessed a steady decline in its profits on account of rising claims and the consequent underwriting deficit as well as falling investment returns.

The study on four nationalised non-life insurance companies has shown that their net profits have more than halved within just three years from Rs 920 crore in 1997-98 to Rs 390 crore in 2000-01 before registering a marginal loss in 2001-02.

``The growing underwriting deficit is only one part of the picture. Diminishing investment returns have further exacerbated the pressures on the non-life industry,'' Crisil said. The industry's investment yield dropped sharply to 11.2 per cent in 2001-02 from 13.5 per cent in 1997-98Despite its declining profits, the industry's solvency cushion was a reassuring factor, Crisil said. However, the continuous decline in the industry's profits would have to be stemmed or it would impact its solvency shield in course of time, Crisil said.

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