Gross non-life premiums increased by 22.1% in November

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NEW DELHI: Group gross direct premiums underwritten for non-life insurance companies grew 22.1% year over year (YoY) to 19,209.2 crore in Nov as of 15,735.3 crore a year ago, data shared by CareEdge reviews showed.

“The non-life insurance industry continued to report double-digit growth in November 2022 after almost flat growth in September 2022. The industry reached 19,209.2 crore in November 2022, a growth of 22.1% year-on-year,” the report said.

So far this year, the industry has grown by 16.5%, compared to 11.6% in the same period last year. Growth was driven by health insurance (especially the group segment) and motor insurance.

“General insurers numbers in November 2022 were up 25.7%, a 6x increase, compared to a 4.2% increase in November 2021, while for YTDFY23, growth driven by the health and auto insurance segments of the group, nearly 1.7x that witnessed last year,” the report said.

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The market share of private non-life insurance companies has steadily increased to 61% in YTD FY23, from 58% in YTD FY22 and 57% in YTD FY21.

Health insurance premiums have been the main growth driver of the non-life insurance industry since the start of the Covid-19 pandemic. This has resulted in the segment’s market share increasing from 29% for YTD FY21 to 35.2% for YTDFY23.

The health segment has grown 22.5% for YTD FY23, which is lower than its 28.9% growth for YTD FY22, it said.

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CareEdge Ratings said that in YTD FY23 auto insurance reached Rs. 50,337 crore and has continued to grow at more than 4 times the reported rate for the same period in FY22.

“In YTD FY23, Motor OD grew 18.1% (versus 4.9% for YTDFY22) and Motor TP increased 16.3% (versus 3.2% for YTDFY22). For November 2022, Auto OD and Auto TP premiums increased by 12.8% and 14.3% respectively. The growth can be attributed to last year’s low base, the repricing of Motor TP rates and higher auto sales,” it stated.

According to the rating agency, the non-life insurance sector has maintained its strong FY23 trajectory, driven by the health insurance and motor segments, supported by supportive regulation. Despite a higher base and lower growth rates compared to FY22, the health segment is expected to witness continued demand amid increased post-Covid awareness and discount rationalization.

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“Long-term auto insurance growth would be driven by growth in the auto industry, which would boost the auto insurance market and increase penetration among uninsured vehicles on the road,” the report said.

Further, with the easing of the impact of the pandemic and higher investment returns, the sector’s profitability is expected to improve as the health sector’s loss ratio moderates. However, inflation and economic slowdown remain risks to growth in the sector, it added.

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