The domestic general insurance industry is expected to grow at a lower rate of 15 per cent in FY14 on the back of continued slowdown in the economic activity, according to an ICRA study.
In contrast, over the past five years, the gross premium written by the general insurance industry has grown at a compounded annual rate of 18.1 per cent to Rs 65,000 crore in FY13, with slowdown visible since FY12.
According to Karthik Srinivasan, Senior Vice-President, Co Head Financial Sector Ratings, the hardening of premium rates and improvement in underwriting has also resulted in a reduction in the losses for the general insurance industry.
According to Srinivasan, the General Insurance industry would require around Rs 17,500 crore of capital over the next five years with the requirement for private sector at around Rs 8,000 crore. The study said the public sector insurers can meet the requirement by divesting part of their equity investments of Rs 33,000 crore.