 "Non-life insurers' profit in green in FY24 after 2 straight years of losses")
After two successive years of reporting losses, the non-life insurance industry has turned profitable in FY24.
The aggregate net profit of the non-life insurance industry, which includes general insurers, standalone health insurers, and specialised PSU insurers, stood at Rs 10,119 crore in FY24. This compares to a net loss of Rs 2,566 crore in FY23 and a net loss of Rs 2,857 crore in FY22, according to the Insurance Regulatory and Development Authority’s (Irdai) annual report for FY24.
While state-owned general insurance companies reported a profit of Rs 157 crore, the profit after tax (PAT) for private sector general insurers stood at Rs 5,983 crore; The PAT of specialised insurers was Rs 3,063 crore; and the standalone health insurers’ reported a net profit of Rs 915 crore.
The underwriting losses of non-life insurers narrowed to Rs 28,555 crore in FY24, a 12.93 per cent year-on-year (Y-o-Y) drop from Rs 32,797 crore in FY23.
The public sector insurers’ underwriting losses constituted 66 per cent of non-life industry losses amounting to Rs 18,862 crore and the remaining by private sector insurers stood at Rs 10,758 crore.
Separately, standalone insurers reported an increase in underwriting losses in FY24 at Rs 723 crore compared to underwriting losses of Rs 529 crore in FY23.
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The investment income of non-life insurers sets off their underwriting losses.
The underwriting profit of specialised insurers increased to Rs 1,788 crore in FY24 from Rs 1,747 crore in FY23.
According to the annual report, in FY24, the non-life insurance industry underwrote a total direct premium of Rs 2.9 trillion in India, registering a growth of 12.76 per cent from the previous year.
During the same period, these insurers collectively incurred claims to the tune of Rs 1.72 trillion, an increase of 15.39 per cent over the same period last year.
Meanwhile, the investment income of all non-life insurers during FY24 stood at Rs 44,129 crore, up 13.62 per cent from FY23.
Meanwhile, the net profit of life insurance companies rose by 10.79 per cent in FY24 at Rs 47,407 crore compared to Rs 42,788 crore in FY23.
Public sector life insurer Life Insurance Corporation of India (LIC) reported an increase in profits by 11.75 per cent Y-o-Y to Rs 40,675.79 crore. Private sector life insurers together reported an increase in profit by 5.32 per cent to Rs 6,731.49 crore in FY24.
The life insurers earned premiums to the tune of Rs 8.3 trillion, registering 6.06 per cent growth over FY23.
While the private sector life insurers clocked a growth of 15.05 per cent in premium, Life Insurance Corporation (LIC) recorded a growth of 0.23 per cent in premium.
Renewal premium contributed to 54.41 per cent of the total premium underwritten by life insurers in FY24. The balance 45.59 per cent was contributed by the new business premium.
The growth in new business premium was 1.93 per cent compared to renewal business at 9.79 per cent.
According to the report, non-linked products contributed Rs 7.08 trillion, which is 85.36 per cent of total premium. The share of linked premium stood at 14.64 per cent.
Business from traditional products grew by 4.56 per cent and the same for linked products was 15.73 per cent.
Meanwhile, the life insurance industry paid total benefits of Rs 5.77 trillion in FY24 which constitutes 70.22 per cent of the net premium.
The benefits paid on account of surrenders / withdrawals increased by 15.29 per cent to Rs 2.29 trillion in FY24 of which LIC accounted for 58.36 per cent.
Life insurers paid Rs 28,868 crore in death claims in FY24 in individual business, and Rs 19,644 crore in group business.