IANS | 20 Apr, 2024
The Indian insurance industry closed FY24 logging a higher growth
rate, with the non-life sector growing at 12.8 per cent and the life
sector at two per cent over FY23 figures.
“In FY24, the non-life
insurance industry reported a premium of Rs. 2.9 lakh crore growing at
12.8 per cent compared to the 16.3 per cent growth reported in FY23,”
said credit rating agency CARE Ratings in a research report.
While
the motor and health insurance segments drove the growth for the
non-life sector, compared to last year’s growth rates, there was a
decline owing to a fall in liability, crop insurance, and credit
guarantee.
Further, for the month of March 2024 as well, the
growth rate was comparatively lower as growth in health was offset by
slower growth in motor and a fall in the fire insurance segment, CARE
Ratings said.
The four public sector general insurers’ grew their
business by 9 per cent last fiscal (gross direct premium Rs.90,344.5
crore) as compared to 10 per cent growth logged in FY23 (Rs.82,891.3
crore), CARE Ratings said.
The FY24 numbers have demonstrated robust growth which can be primarily attributed to group health and motor insurance.
The
specialised insurers logged lower growth last fiscal as compared to
FY23 due to the crop insurance premiums of Agriculture Insurance Company
reduced by 32.1 per cent for FY24, as select public sector general
insurers and a few private general insurers picked up a larger
proportion of crop insurance premiums.
The standalone private
health insurers (SAHI) continued their growth momentum last fiscal
booking a gross premium of Rs.33,116 crore, up from Rs.26,243.9 crore
earned in FY23.
Further, with the sectoral regulator approving two SAHIs in FY24, competition is expected to accelerate even further in FY25.
CARE
Ratings estimates that the Indian non-life insurance market will grow
at a rate of approximately 13-15 per cent in the medium term. The
industry’s growth will continue to be driven by the health and motor
insurance segments as they account for around 68 per cent of the
premiums.
Growth would be aided by macroeconomic factors such as
higher GDP growth, disposable income levels, anticipated favourable
monsoon.
However, intensified competition, an uncertain
international geopolitical environment, and elevated inflation could
potentially negatively affect economic growth and subsequently impact
the non-life insurance sector.
On the other hand, the life insurance sector closed FY24 with two per cent growth in new business premium.
According
to Life Insurance Council, the new business premium for the life
insurers last fiscal stood at Rs.3,77,960 crore as against Rs.3,70,543
crore earned in FY23.
Following alterations in the taxation of
high-value non-linked policies, the life insurance sector encountered a
range of challenges during FY24, including a slowdown in growth, said
Avinash Singh, Senior Research Analyst, Emkay Global Financial Services
Ltd in a report.
Be that as it may, the life insurance industry grew their individual agents base by adding 2,76,850 agents in FY24 alone.
This
increase is being complemented by the rapid pace of digitalisation
being undertaken by life insurers, auguring well for further increases
in insurance penetration that should bolster new business premiums in
FY25 and beyond, said the Life Insurance Council.