India’s non-life insurance industry posts slower growth for October

Year-to-date, a double-digit growth is recorded driven by health and motor.

In October 2023, the non-life insurance industry in India reported a premium of Rs 23,814.6 crore, indicating a more moderate growth of 13.6% compared to the previous month's 29.1% and 18.5% in October 2022. 

The growth is attributed to increases in crop insurance, retail health, and motor OD insurance segments. 

Year-to-date figures for FY24 show sustained double-digit growth, primarily driven by health and motor insurance. 

However, growth is slightly subdued compared to the previous year due to declines in the liability and marine segments, with crop insurance, fire, and credit guarantee segments also reporting slower growth.

Public sector premiums remain approximately one-third of the total aggregate premium. CareEdge Ratings projects a medium-term growth rate of 13-15% for the Indian non-life insurance market. 

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The health and motor insurance segments are expected to surpass Rs 1 lakh crore and Rs 80,000 crore, respectively, in FY24. 

The sector's growth will be driven by rising disposable income levels and overall expansion across various segments. 

Factors contributing to business growth include stabilised loss ratios, cost containment efforts, a favourable regulatory environment, strengthened distribution networks, and increased investment. 

The entry of new companies into the market is expected to intensify competition.

While flood-related damages in Sikkim and surrounding states may adversely impact claims and profitability for the non-life insurance segment, the overall outlook remains stable in the medium term.

However, potential challenges include heightened competition, uncertainties in the international geopolitical environment, and elevated inflation, which could negatively affect economic growth and subsequently impact the non-life insurance sector.