India’s non-life insurance industry skyrockets by 20.7% in June

The year-on-year growth totaled $2.22b

India’s non-life insurance industry continues its growth momentum in FY2023, reporting a year-on-year (YoY) growth of 20.7% in June according to India-based ratings firm CareEdge.

In the first quarter (Q1) of FY2023, the industry saw more than 1.5x growth than in Q1 FY2022. This continued to be driven by the health and the motor segments. Apart from growth in vehicle sales, the Motor segment has also been driven by the Motor TP rate hike which came into force at the beginning of the month.

General Insurers’ June 2022 numbers were up at 19.9% vs 4.9% a year ago whilst for Q1 FY2023, the growth has been twice that seen last year. The continued growth can primarily be attributed to health insurance followed by the motor segment.

Standalone Private Health Insurers (SAHI) have continued their growth trajectory as June 2022 numbers reached $25m, up from $17m in June 2021. However, the jump of 28.6% was lower than the 50.7% growth reported in June 2021, part of the effect of the pandemic as lockdowns were imposed.

Meanwhile, specialised insurers reported a decline of 20.3% in June 2022 after reporting a drop in June 2021. This decline can be attributed to a fall in crop insurance which was partially offset by growth in ECGC premiums.

Health and motor

Health insurance remains the main driver of growth in India’s non-life insurance industry since the COVID-19 pandemic began. Health segment grew by 22.5% in Q1 FY2023 which is a lower growth than 30% experience in the same quarter a year before. However, this has resulted in the segment increasing its market share from 34.2% in Q1FY21 to 39.1% in Q1FY23.

Meanwhile motor insurance has seen the fastest growth amongst non-life insurance segments, exceeding even health insurance. Q1 FY2023 saw a growth of 27.5% as compared to the 3.1% growth in the same quarter last fiscal year.

CareEdge said that despite a higher base, the health segment is set to see more demand amidst increased awareness post-COVID-10 and digital solutions being complemented by offline offerings. Additionally, any rise in premium rates could witness a limited impact.

“The increase in vehicle (excluding two-wheelers) sales and motor TP premium has also aided growth. IRDAI circular to launch add-ons such as pay as/how you drive; and floater option could boost Motor OD adoption. However, the growth could be limited by any unanticipated adverse impact of a new Covid wave and a rise in reinsurance rates,” CareEdge said.

In India, the financial year starts in April and ends in 31 March.

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