India’s non-life insurance sector reached a significant milestone in October 2024, recording premiums of ₹30,378 crore. This represents a 27.5% year-on-year growth, surpassing the ₹30,000-crore threshold for the first time in 79 months. The robust performance reversed a decline in September and outpaced the 13.7% growth seen in October 2023.
Key Drivers of Growth
The surge in October’s premiums was fueled by strong performances in the health and motor own-damage (OD) insurance segments, which compensated for declines in commercial categories such as fire and aviation insurance.
Health Insurance Segment
- Retail health insurance led the growth, with Standalone Health Insurers (SAHIs) outperforming in the segment.
- Rising healthcare awareness and demand for retail health products continue to bolster the sector.
Motor Insurance Segment
- Growth in the motor OD segment was supported by increased passenger vehicle sales, driven by improving consumer confidence and festive season demand.
- However, the motor third-party (TP) segment saw subdued growth due to flat TP insurance tariffs, limiting overall performance. Year-to-Date Performance
Despite the October leap, year-to-date growth in FY 2025 remained moderate compared to FY 2024, reflecting weakness in commercial insurance lines such as fire and crop insurance.
Commercial Segment Challenges
- Declines in crop insurance premiums weighed on overall growth.
- The fire insurance segment also experienced a downturn due to reduced commercial activity in certain sectors.
Expert Insights
Saurabh Bhalerao, Associate Director at CareEdge Ratings
- Attributes October’s strong performance to increased passenger vehicle sales.
- Projects the non-life insurance market to grow at 13%-15% in the medium term, driven by:
- Rising demand for retail health and motor insurance.
- Supportive macroeconomic conditions and favorable regulations.
- Government initiatives like Bima Trinity to enhance insurance penetration.
Sanjay Agarwal, Senior Director at CareEdge Ratings
- Highlights the potential of composite licenses and mergers and acquisitions to reshape industry dynamics.
- Warns that geopolitical uncertainties and intensified competition could pose challenges for sustained growth.
Outlook and Growth Prospects
India’s non-life insurance sector is poised for steady growth, supported by:
- Increasing penetration of health and motor insurance products in retail markets.
- Macroeconomic stability and rising disposable incomes driving demand.
- Regulatory initiatives, including composite licenses, expected to simplify market operations and encourage innovation.
Despite a stable outlook, the industry must navigate challenges such as:
- Maintaining competitive pricing amid rising competition.
- Managing risks associated with global geopolitical uncertainties.
Conclusion
The October 2024 surge in non-life insurance premiums underscores the resilience and growth potential of India’s insurance sector. As health and motor insurance continue to drive demand, regulatory reforms and industry consolidation are expected to further strengthen the sector’s foundation. However, insurers must remain vigilant against competitive pressures and external uncertainties to sustain momentum in the coming years.
