The non-life insurance market is expected to grow 13-15 per cent in the medium term, primarily driven by the health and motor insurance segments, and increasing disposable income levels, according to CareEdge Ratings.

The health insurance segment continues to remain on track to breach the ₹1 lakh crore mark whereas the motor segment crossed the ₹80,000 crore threshold in FY24.

“The overall business growth is also being aided by a favourable regulatory environment, stabilisation of loss ratios, and a focus on containing expenses, Care said.

Overall outlook

While strengthening distribution networks and higher investment will contribute to the sector’s growth, competition is likely to increase as new companies have commenced operations while others continue to be in line to enter the segment, it said, adding that tensions around the Red Sea may impact the marine segment.

“Despite this, overall outlook for the non-life insurance sector remains stable in the medium term. However, intensified competition, an uncertain international geopolitical environment, and elevated inflation could potentially negatively affect economic growth and subsequently impact the non-life insurance sector”.

The non-life insurance industry reported premium of R ₹22,378 crore in February 2024, returning to double-digit growth at 12.6 per cent, albeit slower than 20 per cent in February 2023.

Health insurance

Health insurance continues to be the primary growth driver, with the segment’s market share increasing from 33.2 per cent FY22 YTD (year-to-date) to 37.5 per cent so far in FY24. The health segment has grown by 20.4 per cent, lower than 23.9 per cent in the previous year. Excluding health, general insurance growth was 9.1 per cent ytd  FY24 from the 13.1 per cent including health insurance.

Motor was the second biggest segment, accounting for around 50 per cent of general insurance growth excluding health. In YTD FY24, motor insurance reached ₹82,765 crore, growing 13.6 per cent compared with 15.6 per cent a year ago. Motor OD (Own Damage) grew 18.3 per cent (vs 16.7 per cent for YTD FY23) and motor TP (third party) rose 10.6 per cent (vs 14.8 per cent for YTD FY23).

“The Motor OD segment continued to grow faster in February 2024 compared to the Motor TP segment, yet on the YTD basis the Motor TP segment has a larger market share compared to the Motor OD segment,” Care said.