New Delhi [India], April 19 : The health insurance segment emerged as the primary driver of growth, witnessing a remarkable increase in premiums, breaching the Rs 1 trillion mark and marking a 20.2 per cent growth for FY24, according to the data by Care Edge Ratings.
Motor insurance, comprising approximately 50 per cent of the non-life insurance industry excluding health, experienced steady growth, reaching Rs 91,781.3 crore, with a growth rate of 12.9 per cent in FY24.
In the fiscal year 2023-24 (FY24), the non-life insurance industry in India showcased substantial growth, propelled primarily by the health and motor insurance segments, although facing headwinds from declining liability, crop insurance, and credit guarantee sectors.
Group health insurance remained the dominant force, fueled by enhanced coverage and rationalization of premium discounts.
Government schemes, particularly Ayushman Bharat, significantly contributed to the growth, reflecting an increased share in overall health premiums.
The total premium for non-life insurance reached Rs 2.9 lakh crore, marking a growth rate of 12.8 per cent, a slight dip from the 16.3 per cent growth recorded in the previous fiscal year.
This growth was attributed to the robust performance of the automotive industry, driven by increased sales and premiumization, particularly in the SUV segment.
Other Segments: While health and motor insurance flourished, segments such as liability, crop insurance, and credit guarantee witnessed declines, impacting the overall growth trajectory of the industry.
The marine and fire insurance segments also reported subdued growth compared to previous years.
Public sector general insurers demonstrated a commendable performance in March 2024, with a growth rate of 9.9 per cent, while private sector general insurers grew by 9.5 per cent.
However, the annual growth rate for both sectors fell short compared to the previous fiscal year.
Standalone Private Health Insurers (SAHI): SAHIs continued their growth momentum, with premiums surpassing Rs 4,000 crore in March 2023, reflecting a year-on-year growth of 25.9 per cent.
With the approval of two new SAHIs by IRDAI in FY24, competition in the health insurance segment is expected to intensify further in FY25.
Despite sectoral challenges, industry experts project a growth rate of approximately 13-15 per cent in the medium term, primarily driven by health and motor insurance segments.
Factors such as higher GDP growth, favorable monsoon, and regulatory initiatives are expected to bolster growth.
Intensified competition, uncertainties in the international geopolitical environment, and inflationary pressures pose challenges to the sector's growth trajectory.
Additionally, the absence of a motor third-party rate hike for FY25 and geopolitical tensions around the Red Sea could further impact certain segments negatively.
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