Fire, Health Covers Help Non-Life Segment Grow During Pandemic
Non-life insurance business has grown so far this fiscal despite the pandemic, aided by costlier fire policies demand for health cover during the pandemic.
Gross direct premium income of non-life insurers rose 2.5% over the previous year in April-November, according to data by the Insurance Regulatory and Development Authority of India. That compares to 15.92% in the corresponding period of the previous fiscal.
Fire segment saw the highest growth at 31.2% in premium, followed health at 17.62% growth.
State-owned General Insurance Corporation of India increased reinsurance rates in January. That aided the premium income from fire insurance, according to Prayesh Jain, research analyst at Yes Securities.
Health insurance continued to grow on the back of a surge in demand amid increased awareness due to the and expected price hikes due to new standardisation also aided growth.
Retail health premium has grown at a much faster rate of 42.7% compared with 13.5% in group business, according to a CARE report. "Retail health continues upward trajectory as existing customers raise sum assured levels whereas new customers continue to get added,” Jain said.
Insurers expect demand for retail health policies to grow in the comping years.
While motor insurance growth slowed as auto sales tumbled during the pandemic, own damage cover saw a 54% growth till November, according to IRDAI data. Motor third party saw a 1% decline during this period.
Holding the premium rates for third-party liability insurance steady at last year’s level may also have been a contributing in the fall in the category’s premium, CARE said.
While the motor segment continued to dominate with 32.59% share, it fells from 36.35% in the year-ago period. Health insurance, however, saw its share rise to 28.9% from 25.19%.
CARE expects the industry to grow in the single digits for the year. "The non-life insurance business witnessed a fall in Q1FY21 but recovered in Q2FY21, primarily due to the health segment. Overall, the outlook is expected to be stable in the medium term."