The general insurance industry is pinning its hope on increased automobile sales in the second half of the current financial year, to revive its growth.
"We hope that auto sales will see a demand revival in the second half of the current fiscal due to festivities. This should support growth of the industry," New India Assurance General Manager and Whole time Director K Sanath Kumar said.
The current economic slowdown, which has touched a four-year low growth of 4.4 per cent in the first quarter of this fiscal, has led to a slump in automobile sales in recent months.
This has created considerable strain in the general insurance industry, which draws more than 45 per cent of its total business from the motor insurance segment.
As per data released by the Society of Indian Automobile Manufacturers (SIAM), car sales were down by around 7.5 per cent in July, though major players like Maruti Suzuki India , Honda and Hyundai showed some improvement in August.
On this issue, an official from a private general insurer said that unless auto sales show some improvement, the loss ratio in these segments will rise in the future, but added that the second half is likely to witness better growth.
According to general insurance industry experts, growth has slowed down to around 12 per cent from earlier 18 per cent seen in the last fiscal, due to the slowdown in the domestic economy.
"We have not seen growth uptick as of now, but we hope that the second half will be better," Bharti Axa General Insurance Chief Executive Officer Amarnath Ananthanarayanan said.