Non-life Insurance Premium Growth Slows In July: Report
In a recent report, the CareEdge Ratings says that non-life insurance witnessed muted premium growth in July while public general insurers outpaced their private peers
In July 2024, the non-life insurance industry reported a premium of Rs 29,032.29 crore growing at 9.3 per cent compared to the 13.6 per cent growth reported in July 2023. The industry’s growth has been underpinned by the retail health, motor OD and crop insurance segments for the month. Meanwhile, segments such as fire and aviation reported subdued year-on-year (YoY) growth, said CareEdge Ratings.
Public sector general insurers’ July 2024 numbers rose by 11.2 per cent and outpaced their private peers which grew by 3.7 per cent for the month. This is in stark contrast to the previous period when private players had handily outpaced public general insurers. Meanwhile, the regular rhythm of private players gaining ground has continued for the four months of the current fiscal. According to the rating agency, the growth can be primarily attributed to crop, health and motor insurance segments.
Meanwhile, specialised insurers posted a rise of 48.3 per cent in July 2024 compared to a drop of 53.6 per cent in July 2023. Further, for YTDFY25 specialised insurers reported an increase of 13.5 per cent compared to a fall of 28.7 in YTD FY24.
Notably, standalone Private Health Insurers (SAHI) continued their y-o-y growth momentum at 23.2 per cent in July 2024 which was marginally lower than the 24 per cent reported last July. SAHIs continue to gain a share in retail health from public general insurers. Further, with new SAHIs slated to commence operations, competition is expected to accelerate even further in FY25.
The overall market share of private non-life insurance companies has witnessed a sustained increase to 66 per cent for YTD FY25 from 63 per cent in FY24 and 61 per cent in FY23, highlighting the persistent growth differential between the public and private sectors.
“The first four months of FY25 grew at a sedate pace of 12.1%. The growth was muted as commercial segments such as fire remained weak along with a reduction in the government health business, which was offset by a rise in retail health and crop insurance. SAHIs gained a share in July 2024. The industry's demand will be sustained by growth in the health and the motor segment. Additionally, competition is increasing especially in the health segment as new companies have commenced operations,” said Saurabh Bhalerao, Associate Director, CareEdge Ratings.
Notably, CareEdge Ratings estimates that the Indian non-life insurance market will grow at a rate of approximately 13 to 15 per cent in the medium term.
"The overall business growth would be supported by macroeconomic factors, a favourable regulatory environment, and the Bima Trinity. Additionally, reports of composite licenses and M&A could alter sectoral dynamics. The overall outlook for the non-life insurance sector remains stable in the medium term. However, intensified competition, and an uncertain international geopolitical environment, could impact the non-life insurance sector,” said Gaurav Dixit, Director, CareEdge Ratings.
