Non-life insurance industry sees robust growth of 16.4% driven by health and motor insurance, according to industry report.
The non-life insurance industry in India has been experiencing robust growth, with the health and motor insurance sectors driving the demand. In FY23, the industry witnessed an impressive growth rate of 16.4%, surpassing the previous year’s growth rate of 11.1%. This growth rate can be attributed to the increasing demand for health and motor insurance segments, which have witnessed double-digit growth in March 2023.
Furthermore, private non-life insurance companies have outperformed their public counterparts, with a sustained increase in market share, accounting for 62% of the industry’s total share in FY23. This trend is expected to continue in the coming years, as private insurers continue to focus on expanding their product portfolio, improving their distribution network, and leveraging digital technology to enhance customer experience.
The health insurance segment is likely to reach the milestone of ₹1 lakh crore, while motor insurance premiums are expected to cross ₹85,000 crore in FY24. To improve their profitability, insurance companies are focusing on controlling management expenses, strengthening their distribution channels, and investing in digital enablement to streamline their operations and provide better services to their customers.
Despite the positive growth trend, the non-life insurance sector faces challenges due to increased competition and the uncertain geopolitical environment. Additionally, high inflation and other economic challenges could negatively impact the industry’s growth in the medium term. To mitigate these challenges, insurers need to be proactive in identifying emerging risks and develop innovative solutions to meet the changing needs of their customers.
In conclusion, the non-life insurance industry in India is witnessing strong growth, driven by the health and motor insurance sectors. Private non-life insurance companies are leading the growth trajectory and are expected to continue to do so in the coming years. However, the industry faces challenges due to increased competition, an uncertain geopolitical environment, and economic challenges. Therefore, insurers need to remain agile, leverage technology, and offer innovative solutions to stay ahead in the game.