The data from General Insurance Council shows that general insurance in first two months of current financial year saw gross premiums at Rs 25,363.06 crore compared to Rs 28,124.13 crore in previous year.
Gross direct premium underwritten by the non-life insurance companies has declined by 9.8% year-on-year (y-o-y) in this fiscal. The fall in premiums was led by motor insurance, which was down due to the lower vehicles sales. However, segments such as fire and health insurance saw growth in April and May.
The data from General Insurance Council shows that general insurance in first two months of current financial year saw gross premiums at Rs 25,363.06 crore compared to Rs 28,124.13 crore in previous year. Market participants say that non-life insurance will continue to see lower growth this year as there will no improvement in motor insurance which has a large market share in the premiums.
According to the General Insurance Council, motor insurance (which includes third party and own damage) has a market share of 26.6%. While health insurance has the highest market share at 36%. Mahesh Balasubramanian, MD and CEO at Kotak General Insurance says, “Motor premiums will continue to struggle as basic demand is not there in the economy. So, industry will not be able to grow the motor premiums as number of new vehicles coming on the roads is going to be very less. We have not seen increase in prices in third party premiums this year and I think it will continue to de-grow and we do not see it reviving in near short term.”
In April and May, motor insurance saw premiums of Rs 6,753.63 crore compared to Rs 10,511.15 crore in previous year, a fall of 35.7%. However, health segment saw growth of 7.5% in first two months of current fiscal at Rs 9,122.18 crore. The data from General Insurance Council shows that, retail health has seen higher growth at 14.23%, while health group schemes saw growth of 6.75% in this fiscal.
According to the CARE Ratings, muted growth in the economy and decline in key sectors such as auto and manufacturing is expected to negatively impact the non-life insurance industry, which could be offset partially by the pandemic creating a renewed interest in the health segment.