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The non-life insurance industry, including general, standalone health and specialised PSU insurance companies, have witnessed a 13.1 per cent growth in premiums to Rs 2.63 trillion in the first 11 months of FY24, up from Rs 2.32 trillion in the year-ago period. The growth was backed by the rise in health and motor insurance premiums.
According to the data released by the general insurance council, health insurance premiums have grown by 20.39 per cent year-on-year (Y-o-Y) during the April 2023-February 2024 period, while motor insurance premiums have gone up by 13.60 per cent.
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The two segments of the industry together account for more than 60 per cent of the overall non-life insurance business. Since the pandemic, the demand for health insurance policies has been on the rise due to increased awareness among people of being underinsured and rising medical inflation. Meanwhile, rising vehicle sales support the growth in motor insurance. According to the data, retail health and group health premiums have increased by 19.22 per cent and 20.56 per cent, respectively so far in FY24.
ALSO READ: Medical inflation driving up ticket sizes for retail health insurers
The two segments of the industry together account for more than 60 per cent of the overall non-life insurance business. Since the pandemic, the demand for health insurance policies has been on the rise due to increased awareness among people of being underinsured and rising medical inflation. Meanwhile, rising vehicle sales support the growth in motor insurance. According to the data, retail health and group health premiums have increased by 19.22 per cent and 20.56 per cent, respectively so far in FY24.
"The industry gross domestic premium income (GDPI) growth in 11MFY2024 has been supported by the strong growth in the health segment driven by a surge in demand for health policies following the Covid-19 pandemic. GDPI growth for the motor segment remains strong with relatively higher growth in the motor – OD segment as compared to the motor - TP segment likely due to no hikes in the motor -TP rates,” said Neha Parikh, Vice President, Sector Head-Financial Sector Ratings, ICRA. OD is own-damage and TP is third party.
However, due to higher base, the growth in health insurance policies have moderated in the period under review to 20 per cent from nearly 24 per cent in the corresponding year ago period. Similarly, the motor segment has also seen a moderation in growth rate from 16 per cent in April – February period of FY23 to nearly 14 per cent so far in this financial year.
Among other segments, the premium growth in fire, marine, and crop insurance has seen a tepid performance. According to the data, fire insurance premiums have increased by 8.16 per cent so far in the current FY, whereas marine insurance premiums are down by 1 per cent during this period. Similarly, crop insurance premium has also declined by 5 per cent.
Parikh added that ICRA expects incremental GDPI of Rs 42,500 crore - Rs 44,000 crore for the industry in FY25 to reach an overall GDPI of Rs 3.22-3.24 trillion, translating into an estimated growth of 15-16 per cent Y-o-Y from Rs 2.79 - 2.80 trillion estimated for FY24. The figure for FY23 was Rs 2.41 trillion. Private insurers are expected to continue to gain market share with a 69 per cent share in GDPI in FY25, up from 66 per cent in FY23 and 50 per cent in FY17, she said.
In terms of the market share, the public sector general insurers stood at 31.35 per cent of the overall general insurance industry in February 2024 as against 32.55 per cent in February 2023. The private insurers, on the other hand, witnessed an increase in market share to 53.79 per cent in the reported month as compared to 51.39 per cent in the year ago period.
