The growth in premium collected by the general insurers in January at 6.7% remained tepid even as health and fire insurance segments continued to witness robust growth. A muted demand for automobile and crop insurance dragged down the industry to a slow start to the calendar year.
Non-life insurance premium reached Rs 18488.1 crore for the month against Rs 17333.7 crore January of 2020. At 2.8% the Gross Direct Premium (GDPI) growth has been much slower for the year-to-date (YTD) period for FY21, as per data released by the General Insurance Council.
General insurers have collected Rs 1.63 lakh crore YTD in FY21 as against Rs 1.59 lakh crore in the same period last year, the latest data showed. The growth comes despite near washout of new business in most segments such as motor, marine and small business during the initial coronavirus pandemic.
The non-life insurance business which had witnessed a fall in Q1FY21 has continued on its recovery path after returning to growth in Q2FY21 primarily due to the fire and health segments,” according to a report by
“However, the industry is likely to grow in the single digits for the year. Overall, the outlook is expected to be stable in the medium term.”
Health insurance continued to grow on the back of increased urgency among households to buy medical covers driven by covid-19 induced awareness.
The health insurance segment in FY21 up to January has grown 14.6 percent to Rs 48,501 crore on the back of pandemic-induced demand for retail products. This segment has captured nearly 30% of all business done by general insurers.
Group health business on the other hand grew 10 per cent. Government schemes and overseas medical insurance, on the other hand, saw contraction in the reporting period. Fire segment, meanwhile, grew by 30.4%, mainly due to increase in reinsurance rates by
The motor insurance segment – the largest in terms of market share with 33.4% of the non-life pie – saw accrued premiums contract 4.57 per cent to Rs 54,908.5 crore from last year. However, the fall in YTD January number is lower than the fall witnessed in the YTD December number.
“This can be attributed to the higher registrations witnessed in January 2020. However, muted growth in the economy and subdued activity in January 2021 auto registrations continue to impact the motor insurance business,” the CARE Rating report said.
Crop insurance business of non-life insurers contracted by Rs 2714 about 9.5 percent against last year to Rs 25,998 crore till January as specialised crop insurers such as Agriculture Insurance Co of India steadily have increased their exposures in the segment.