Non-life insurers post 27.5% premium growth in October, shows data

Non-life insurers have reported a 27.53 per cent year-on-year (Y-o-Y) growth in premiums in October, driven by growth in standalone health and multi-line insurers. Recovery in motor sales also supported the growth of general insurers. Additionally, some companies reported their premium figures based on the new reporting format effective from October 1, 2024.

 

Data indicates that general insurers collected Rs 25,396.68 crore in premiums in October, reflecting a 23 per cent Y-o-Y increase. The largest general insurer, New India Assurance, reported a 0.62 per cent Y-o-Y increase in premiums, while the second largest, ICICI Lombard General Insurance, posted a 7.48 per cent Y-o-Y growth. Other state-owned insurers, United India Insurance reported a 2.44 per cent Y-o-Y rise, National Insurance saw a 156.70 per cent Y-o-Y growth to Rs 2,488.12 crore, and Oriental Insurance's premiums rose 11.6 per cent.

 

Among major private general insurers, Bajaj Allianz General reported over 100 per cent Y-o-Y growth to Rs 3,859.72 crore, while HDFC Ergo saw a decline of 10.39 per cent Y-o-Y to Rs 1,629.85 crore.

 

Standalone health insurers (SAHI) reported robust growth of 25 per cent Y-o-Y in premiums in October, reaching Rs 3,119.06 crore, with Star Health and Allied Insurance reporting a 13.7 per cent Y-o-Y growth to Rs 1,283.63 crore.

 

The Insurance Regulatory and Development Authority of India (Irdai) revised the format for reporting premium figures. The regulator has mandated that long-term premiums be reported based on the 1/N method, where N is the number of days of the policy. The new norms are effective from October 1, 2024.

 

For the month under review, some companies have reported figures using the previous method, while others have adopted the new Irdai format. As a result, the numbers are not directly comparable.

 

“Irdai recently revised the format for reporting premium figures. Insurers must now recognise and report long-term premium income over the period of risk using the 1/N method. This approach ensures that premium income is allocated more evenly over the policy period, improving transparency and aligning with global best practices in financial reporting. This adjustment reflects a more accurate view of premium income spread across the policy duration,” said Sharad Mathur, managing director and chief executive officer, Universal Sompo General Insurance.

 

“The norms are already applicable in motor insurance, so this segment will not be impacted. The new norms will affect other long-term policies like health and home insurance. However, the changes will not impact the revenue or cash flow of the companies, though there may be some effect on the expense of management (EoM),” said an official from a general insurer.

 

According to a Nuvama report, the industry grew 27.6 per cent Y-o-Y, with SAHIs’ gross direct premium income (GDPI) growth at 25.1 per cent Y-o-Y. Public multi-line insurers reported GDPI growth of 24.9 per cent Y-o-Y, while private multi-line insurers showed strong GDPI growth of 22.1 per cent Y-o-Y. Public multi-line insurers continued to lose market share (-122 basis points Y-o-Y to 30.4 per cent) to private multi-line insurers (+49 basis points Y-o-Y to 54.6 per cent) and SAHIs (+138 basis points Y-o-Y to 11.6 per cent).

 

The report also noted that the revival in retail motor sales contributed to improved premium growth.

 

Meanwhile, in the April-October 2024 period, non-life insurers reported a 9.9 per cent Y-o-Y growth in premiums, primarily driven by the performance of SAHI players, who posted a 24.77 per cent premium growth. General insurers saw a 9.02 per cent Y-o-Y increase in premiums during this period, while specialised public sector unit (PSU) insurers reported a 7.9 per cent Y-o-Y growth.

 

“The slowdown in motor sales during the financial year and the drop in commercial rates have affected the growth of multi-line general insurers during this period,” a general insurer said.