Key Points:
- Motor insurance’s share in the non-life insurance industry has dropped below 30% for the first time, largely due to slowing car sales.
- Health insurance premiums have surged, accounting for over 41% of total non-life insurance premiums.
- The non-life insurance industry recorded a total premium of Rs. 72,758 crore by the end of June 2024, marking a 13.3% growth from the previous year.
- While health insurance grew by 16.6%, motor insurance saw an 11.9% increase in premiums.
- The share of health insurance is expected to continue rising, while motor insurance may remain a drag on growth due to its reliance on new vehicle sales.
The share of motor insurance within the non-life insurance industry has dipped below 30% for the first time, a significant milestone reflecting the ongoing slowdown in car sales. In contrast, health insurance continues to see rapid growth, outpacing other segments in the non-life insurance sector.
As of the end of June 2024, the non-life insurance industry had written premiums amounting to Rs. 72,758 crore, according to data released by the General Insurance Council. This represents a 13.3% increase compared to the previous year. However, the growth in motor insurance has not kept pace with the overall industry, with premiums increasing by only 11.9% to reach Rs. 21,348 crore.
In comparison, health insurance has seen a robust growth of 16.6%, bringing in premiums of Rs. 29,915 crore. This surge has led to health insurance accounting for 41.1% of the total non-life insurance premiums, a significant increase from previous years. Meanwhile, motor insurance’s share has slipped to 29.3%.
Industry experts predict that the share of health insurance will continue to rise, driven by increasing demand and a growing awareness of health risks. Conversely, motor insurance is expected to remain a drag on the sector’s growth. The focus on new car sales for motor insurance, driven by regulations requiring buyers to purchase three to five years of cover upfront, has limited the segment’s growth potential.
Recent data also indicates that the non-life insurance industry is experiencing slower growth in premium collections. For July 2024, the industry recorded a total premium of Rs. 26,567 crore, a 9% increase from July 2023. This growth rate is in single digits for the second consecutive month, further highlighting the challenges faced by the motor insurance segment.
Despite these trends, health insurance continues to be the major driver of growth in the non-life sector. Standalone health insurance companies have reported a 25% increase in premium income up to June 2024, reflecting the strong demand for health cover.
Overall, the non-life insurance industry remains dominated by health and motor insurance, which together account for over 70% of total premiums. Other segments, such as property insurance (less than 10% of total premiums) and crop insurance, personal accident, liability covers, and miscellaneous insurance (around 10% combined), continue to play a smaller role in the industry.
