Public insurers lag behind private in Indian market

Health and motor insurance were key growth drivers for private insurers.

India’s non-life insurance sector saw its premiums Rs. 24,554.3 crore end-August, a 4.2% year-on-year (YoY) increase, data from the General Insurance Council and Insurance Regulatory and Development Authority of India (IRDAI) showed.

This was a rebound compared to the 3.7% decline in the same period last year. This modest growth was driven by the retail health and motor own damage (OD) segments, whilst the fire and crop insurance segments underperformed.

Public Sector General Insurers saw a 4.6% drop in premiums for August 2024, whilst private insurers grew by 4.7%.

This trend of private insurers outpacing their public counterparts has continued for the first five months of the current fiscal year, although private sector growth has been slower compared to last year. 

Health and motor insurance were key growth drivers for private insurers, but their gains were partially offset by weakness in the fire insurance segment.

Specialised insurers saw a slight decline of 0.2% in August 2024, a notable improvement from the 68.4% drop in August 2023. Year-to-date (YTD FY 2025) figures show a 6.0% increase in specialised insurance, compared to a 57.7% fall in the same period last year.

The overall market share of private non-life insurance companies has risen to 66% in YTD FY 2025, up from 63% in FY 2024 and 61% in FY 2023. 

Health insurance premiums remain the largest segment in the non-life insurance market, increasing their share from 35.4% in YTD FY 2023 to 39.2% in YTD FY 2025. 

However, this share has slightly decreased from around 40% in YTD July 2024 as other segments continue to grow. 

“The non-life insurance premiums for the first five months of FY25 grew at a sedate pace of 10.5%. The growth was muted as commercial segments such as fire remained weak along with a reduction in the government health business, which was offset by a rise in retail health and motor OD,” said Saurabh Bhalerao, Associate Director, CareEdge Ratings.

“SAHIs have outpaced both the aggregate industry as well as the health segment growth. The industry's demand will be sustained by growth in the health and the motor segment. Additionally, competition is increasing especially in the health segment as new companies have commenced operations,” added Bhalerao.

CareEdge Ratings estimates the Indian non-life insurance market will grow at a rate of 13% to 15% in the medium term, supported by macroeconomic factors, regulatory developments, and the Bima Trinity. 

However, increased competition and global geopolitical uncertainty could pose challenges to the sector, according to Gaurav Dixit, Director at CareEdge Ratings.