India’s non-life insurance premiums expand slower in May
Indian non-life insurance market is projected to grow by approximately 13-15% in the medium term.
In May, India’s non-life insurance industry witnessed a premium of Rs18,196.0 crore, marking an 18.1% year-on-year (YoY) growth, data from the Insurance Regulatory and Development Authority of India (IRDAI) showed.
However, this growth rate was lower compared to the 25.3% growth recorded during the same period last year.
The Indian non-life insurance market is projected to grow by approximately 13-15% in the medium term, CareEdge Ratings reported.
The health insurance segment is expected to surpass the Rs1 lakh crore milestone, while motor insurance premiums are anticipated to exceed Rs85,000 crore in FY24.
This prediction is based on the fact that motor insurance premiums have already surpassed Rs90,000 crore and the health insurance segment has crossed the Rs80,000 crore mark in the previous year.
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The growth of the non-life insurance sector is expected to be driven by various factors. These include the health and motors segments, an anticipated increase in per capita and disposable income levels, and a higher volume of transactions in segments such as fire, marine, export credit, and customised or new products.
Furthermore, the sector is expected to benefit from improving profitability and the stabilisation of loss ratios, which had risen during the pandemic.
There will be efforts to control management expenses in line with regulations, along with an enabling regulatory environment. Distribution networks are set to strengthen, with an increase in the number of partners, digital issuance, and online channels experiencing continued growth.
Additionally, higher investment yields due to an elevated interest rate environment and the availability of growth capital are expected to support the sector's growth.
Overall, the medium-term outlook is projected to be stable, said CareEdge.
However, it is important to note that intensified competition, an uncertain geopolitical environment, and high inflation could negatively impact economic growth and consequently affect the non-life insurance sector.