Indian general insurers likely to hit $36.4b in 2025
The sector has a CAGR of 8.7% over FY2019-2024.
India’s general insurance industry is projected to hit $36.4b (INR2.9t) in 2025 from $27.7b (INR1.9t) in 2019, according to a GlobalData report.
The sector has a compound annual growth rate (CAGR) of 8.7% over FY2019 to FY2024, driven by the expected economic recovery come H2 2021.
“The Reserve Bank of India (RBI) has maintained the country’s GDP estimates at 10.5% for FY2022 despite the second wave of COVID-19 spread. Improvement in domestic demand and increased investment activity is expected to aid in the economic recovery,” said GlobalData analyst Deblina Mitra.
The motor segment, which accounted for one-third of general insurance business in 2019, is expected to grow 4.7% this year. The current decline in automobile sales due to the re-imposition of lockdown at the federal level is expected to be short-lived, and with the pick-up in vaccination drive, the demand for auto sales and motor insurance will be restored.
Property insurance, which comprised 28% of general business in 2019, is likely to grow 10% in 2021 primarily due to higher prices. In 2020, fire insurance premiums jumped by up to 25% after GIC Re increased its reinsurance rates.
Personal accident and health (PA&H) insurance is also expected to remain strong and grow at a CAGR of 14.2% over the next five years, per GlobalData’s Global Insurance Database. Higher health awareness and demand for COVID-19 specific products triggered strong retail sales last year.
Moreover, the extension of ‘sale and renewal’ of such products until September 2021 and the launch of standard personal accident insurance ‘Saral Suraksha Bima’ from 1 April 2021 are other positive developments that will further contribute to the demand for PA&H insurance.