The Indian car insurance market is not the only one in the country where costco has emerged as the main beneficiary of a merger between the two companies, according to a new report.
Costco has become the largest auto insurer in India, with about 5.6 million customers, the report said, citing data from the Insurance Regulatory and Development Authority of India (IRDAI).
This compares with about 3.4 million at rival insurance provider Bharat Seva.
The market shares of Bharat and Costco, which were consolidated in the year 2015, stood at about 45 per cent and 35 per cent respectively, according the report, titled The Indian Car Insurance Market 2016.
The two companies together have about 2.4 crore cars in the market.
The report also said that costco is now facing serious competition from its rival Bharatseva, which has over 5.7 million vehicles in the same market.
The report said costco, with nearly a billion subscribers, had about 3,300 more subscribers than Bharat, which is now only about 200 million subscribers.
The competition in the insurance market has seen costco’s share rise from about 15 per cent in 2015 to nearly 20 per cent today, the paper said.
Costcos revenue has also increased over the last few years, from about $100 million in 2015-16 to $250 million in 2020-21, according, to the report.
The two companies have been embroiled in a fierce rivalry over the pricing of car insurance.
The companies have come under attack for charging a higher premium than their competitors.
However, costco and Bharat have been arguing over the price of auto insurance for the last two years.
The Bharat government recently ordered insurance providers to put down a 20 per, 25 per and 50 per cent premium on the rates of their policies, which was a big hit on costco.
The Bharat insurance regulator has also set a target of raising the premium on policies by 5 per cent, said the report citing data.
The costco CEO, V K Raju, was quoted in a report as saying, “We are not going to settle the price issue.
We are going to fight the competition in India with the same spirit.
We will continue to do our job of providing affordable car insurance to our customers”.
The costcos plan to take the fight to Bharat SEVA and Bharatiya Insurance Corporation, which had already been the target of an insurance crackdown by the Bharatiyas government.
Raju said the company is targeting Bharat by “putting pressure” on the two entities.
He said the plan was to “take up the fight” with the Bharat authorities.