Indian general insurers expect single-digit premium growth in FY2022: report

It is expected to post a 3-4.5% marginaL ROE due to investment income.

The Indian general insurance sector will see a single-digit growth of 7-9% in gross direct premium income (GDPI) in FY2022, boosted by the health and motor segments, according to an Icra report.

It is expected to post a marginal return on equity (ROE) of 3-4.5%, primarily supported by investment income despite underwriting losses.

The sector recorded a sluggish growth rate of 4% to $25.4b (INR1.85t) in FY2021 largely as a result of the pandemic and subsequent social mobility restrictions. This was a far cry from the 14% growth rate recorded in 2019.

Public-sector undertakings (PSUs) had a hard time adapting to digitalisation, triggering a 2% on-year drop in business to $9.8b (INR718b). On the other hand, the private sector saw an 8% YoY jump in gross direct premium income to $15.5b (INR1.13t).

The health & personal accident segment grew 12%, with PSU entities registering a 2% growth and private sector firms jumping 16%. Meanwhile, the motor segment grew 2% to $9.3b (INR678b), due to restrictions and lower vehicle sales. 

Fire insurance plans comprised 11% of the overall GDPI, with total premium rising 27% in FY2021 from 35% in FY2020.