The non-life insurance industry in India witnessed a 14.9% year-on-year increase in premiums for May 2024, reaching Rs20,908 crore. This growth rate, although robust, marked a slight deceleration compared to the 18.1% growth recorded in the same month last year.
Health and motor insurance segments played pivotal roles in bolstering the overall industry performance, while fire insurance experienced a more subdued year-on-year growth of 4.2%.
Health insurance emerged as the primary growth driver, expanding its market share from 39.6% in year-to-date fiscal year 2023 (YTD FY23) to 41.3% in YTD FY25. Despite this, the growth rate in the health segment moderated to 16.9% in YTD FY25 from 22.6% in the previous fiscal year.
Excluding health insurance, the non-life insurance industry grew by 15.7% in YTD FY25, compared to 16.7% growth when health insurance is included.
Motor insurance, constituting approximately 50% of non-life insurance premiums excluding health, recorded premiums of Rs14,035.2 crore in YTD FY25, growing at 15.4% compared to 23.1% in YTD FY24.
“The industry’s growth momentum is expected to sustain, driven by robust expansion in health and motor insurance segments. Furthermore, heightened competition in the health insurance sector, with new entrants and potential market expansions, is anticipated,” stated Saurabh Bhalerao, Associate Director at CareEdge Ratings.
The Indian non-life insurance market is projected to grow at a rate of 13% to 15% in the medium term, supported by favorable macroeconomic conditions, regulatory environment, and initiatives under the Bima Trinity framework.
“Efforts aimed at cost containment and strengthening distribution networks are poised to contribute further to the sector’s growth trajectory. Additionally, potential changes such as composite licenses and mergers and acquisitions could reshape industry dynamics,” noted Gaurav Dixit, Director at CareEdge Ratings. He added, “While the medium-term outlook for the non-life insurance sector remains stable, factors such as intensified competition and global economic uncertainties could influence growth dynamics.”
In summary, the Indian non-life insurance sector continues to exhibit resilience amidst evolving market dynamics, supported by strategic initiatives and sector-specific reforms aimed at sustaining growth momentum.
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