India’s general insurance industry growth rate sluggish in August

Private insurers outpacing public peers continues to be a growing trend.

India’s general insurers showed a slower growth rate in August FY 2023 at 9.3% compared to 17.9% in the same month last year, according to a report by CareEdge.

After over 20% growth in Q1 FY23, the non-life insurance industry registered a growth of 16% and 11.9% in July and August, respectively. In the year-to-date (YTD) period, the industry has grown 18.6%, compared to 17.4% in the same period last year. This growth is driven by health motor and crop insurance.

ALSO READ: Virtual insurer Bowtie cuts down product prices by half

Standalone Private Health Insurers (SAHI) have continued their growth trajectory as August 2022 numbers reached $258.1m, up from $201.7m in August 2021, moreover, this monthly growth was higher than the 25.8% growth reported in August 2021. On the other hand, the YTD growth rate was slower in the current year vs. last year.  CareEdge said this slowing growth was on account of the normalized growth in the government health schemes in the current year, whilst last year, the same had posted significant growth.

Meanwhile, specialized insurers posted a significantly slower increase of 15.2% in August 2022 after reporting an increase of 52.5% in August 2021. The growth can primarily be attributed to a rise in crop insurance and ECGC premiums

The trend of private players outpacing their public peers has continued, with private companies growing faster than their public counterparts. The market share of private non-life insurance companies has witnessed a sustained increase to 59% in YTD FY 2023 from 57% in YTD FY2022 and 56% in YTD FY2021. 

“Driven by the health segment and the private sector, which has grown at a faster rate than the public sector, the non-life insurance industry has maintained its strong FY23 journey. Despite a higher base, the health segment is anticipated to witness more demand amid increased awareness post-Covid. The long-term growth of motor insurance would be driven by growth in the automotive industry which would boost the motor insurance market and increase penetration amongst the uninsured vehicles on road. Digital solutions complemented by offline channels would continue to contribute to the growth momentum. However, the growth could be limited by any unanticipated adverse impact of a new Covid wave and a rise in reinsurance rates,” CareEdge said.

India’s FY 2023 starts from April 2022 to March 2023.