Non-life insurance industry grows by over 16% driven by health and motor insurance

Barring a blip in September 2022, the CareEdge report states that the segment is set to register double-digit growth for the month of March 2023, continuing the trend for FY2023.

Industry reported premium 24,271.4 crore for March 2023, a growth rate of 11.5%, the rating agency said in its report.

There was a 9.7% growth in the number of general insurers as of March 2023 as compared to a growth of 13.8% in March 2022, while for FY23, the growth driven by the group health and motor segments is expected to double that of the previous year. , the report said.

Accordingly, the Standalone Private Health Insurer (SAHI) continued to move ahead on its growth curve as it touched the figures for March 2023. above 3,428.4 crores 2,829.9 crore in March 2022 and 2,319.8 crore in February 2023. This monthly growth of 21.2% was higher than the 15.6% reported in March 2022, although the growth rate declined sequentially from 26.8% in February 2023.

Meanwhile, the growth rate for FY23 was also slower in the current year versus the previous year. CareEdge said the current year was due to a modest growth in government and retail health plans, while last year, the same registered significant growth.

Specialty insurers reported a growth of 16.2% in March 2023 as compared to a decline of 18.3% in March 2022. Meanwhile, the numbers for FY23 are growing at 5.3% versus 14.7% in FY22.

Looking at the FY23 numbers, private players grew 2.2 times that of their public counterparts, attributing to their stronger market presence and relatively better solvency levels. The market share of private non-life insurers has seen a steady growth from 59% in FY12 and 57% in FY11 to 62% in FY23.

The report states that for the month of March 2023, private companies registered a high growth of 14.8% while public sector non-life insurance companies registered a growth of 5.8%.

CareEdge estimates that the Indian non-life insurance market will grow by around 13-15% in the medium term. Health insurance clause on the way to breach 1 lakh crore mark, while motor insurance premium will cross 85,000 crore in FY24 in view of the fact that they have already crossed 90,000 crores and 80,000 crore mark respectively during the previous year, the rating agency said.

This growth is driven by the popularity of health insurance products/plans, increasing demand for motor insurance (third party and owner damage) products, expected increase in per capita/disposable income levels, higher transaction volumes under sectors such as fire, marine, export credit, customized products, especially motor and health insurance and gradually introducing new products.

According to the rating agency, insurance companies will aim to improve their profitability by stabilizing the loss ratio affected by the pandemic. They plan to control management expenses, comply with regulations, and strengthen their distribution network by adding more partners and using digital and online channels.

The agency also anticipates continued growth in investment returns due to rising interest rates and the availability of growth capital, which will help support companies’ growth in the future.

Companies are expected to make significant investments in digital enablement across all distribution channels including expanding their online/digital channels to simplify the insurance purchase process. They will also enhance their underwriting capabilities with automated/AI-based underwriting with a focus on improving cost to maintain margins.

While the outlook is expected to remain stable in the medium term, the agency cautioned that intense competition, an uncertain geopolitical environment, and high inflation could negatively impact economic growth and, subsequently, the non-life insurance sector. the agency said.