May 6, 2014
The non-life insurance sector in India is expected to see a pick-up in growth in gross premiums in the current financial year ending 31 March 2015. Growth is forecast to be 15%, higher than the 12% reported for the financial year ended 31 March 2014.
The market has slowed compared to previous years. For instance, non-life growth was 19% in FY 2012-13 and 23% in FY 2011-12.
“The slowdown was driven by lower economic growth, reduced car sales, and lower hiring by companies which drive the corporate health insurance business. The growth momentum is likely to pick up in the second half of this year since the economic slowdown has bottomed out last year,” Mr Bhargav Dasgupta, managing director and chief executive officer of ICICI Lombard General Insurance, told the Financial Chronicle.
“I expect the growth of the non-life insurance sector to be around 15% in the current year driven by improvement in economic growth,” he added.
A senior official of state-owned Oriental Insurance said: “The non-life sector would grow by 15% in 2014-15 driven purely by health and motor insurance businesses.”
For FY 2013-14, gross premiums collected by all general insurers rose by 12.23% to INR 775.38 billion (US$12.88 billion), according to the Insurance Regulatory and Development Authority (IRDA). The four state-run general insurance companies collected gross premiums of INR 432.92 billion, an increase of 9.86% from a year earlier. The performance gave them a 55.8% share of the non-life market, marginally lower than the 57% market share chalked up for FY 2012-13.
Private-sector insurers saw business growing at a faster rate than for their state-owned rivals. They collected gross premiums of INR 342.46 billion for FY 2013-14, that represented an increase of 15.37% over the previous year.
For FY2013-14, motor insurance accounted for 46% of total gross premiums to remain the largest class of business, followed by health insurance which contributed 26%. Fire and engineering insurance had a 14% share, and was directly affected by the slowdown in the economy, postponement of capital expenditure and new infrastructure projects.