India's non-life industry slows down in November

The slow expansion was attributed to sluggish performance in health and motor third-party insurance, along with a decline in crop insurance.

India’s non-life insurance sector expanded 8.8% to of Rs20,897.6 crore in November. However, this was slower than the previous month’s 13.6% and last year’s 22.1%, data from CareEdge showed.

The slow expansion was attributed to sluggish performance in health and motor third-party insurance, along with a decline in crop insurance.

Despite the slowdown in November, the industry has continued to report double-digit growth for the year-to-date fiscal year 2023-24, primarily driven by health and motor insurance segments.

Health insurance premiums continue to be the primary growth driver for the non-life insurance industry. The health insurance segment's market share has increased from 33.4% for the year-to-date fiscal year 2022 to 37.4% for the year-to-date fiscal year 2024.

The growth in the health segment was 21.1% for the year-to-date fiscal year 2024, slightly lower than the 22.5% growth witnessed for the same period in the previous year.

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Motor insurance reached Rs. 57,927.6 crore for the year-to-date fiscal year 2024, growing at 15.1% compared to 17.0% in the previous year. Motor own damage (OD) grew by 19.3%, while motor third-party (TP) rose by 12.3% for the year-to-date fiscal year 2024.

Motor insurance growth was faster in November 2023 compared to October 2023.

Government schemes in health insurance grew sharply in the year-to-date fiscal year 2024, increasing their share to 10.5%. The overseas medical segment has returned to pre-pandemic levels as international travel has increased.

Outlook

CareEdge Ratings estimates that the Indian non-life insurance market will grow at a rate of approximately 13-15% in the medium term. The health and motor insurance segments are expected to breach the Rs 1 lakh crore and Rs 80,000 crore marks, respectively, in the fiscal year 2023-24.

Flood-related damages in Sikkim and severe floods in Tamil Nadu may have an adverse impact on claims for the non-life insurance segment, impacting profitability.

Despite challenges, the overall outlook for the non-life insurance sector in India remains stable in the medium term.