Slowdown in health and motor segment drag non-life premiums in Feb

According to General Insurance Council data, general insurers, who operate in multiple business lines, witnessed about 5 per cent YoY drop in premiums to Rs 17,399.3 crore in February

Premiums of non-life insurance companies dropped 2.82 per cent year-on-year (Y-o-Y) in February to Rs 21,747.57 crore from Rs 22,378.12 crore in the year-ago period, due to changes in accounting norms and a slowdown in premium growth in the health and motor segments.

 

According to General Insurance Council data, general insurers, who operate in multiple business lines, witnessed about a 5 per cent Y-o-Y drop in premiums to Rs 17,399.3 crore in February, while premiums of standalone health insurers rose 7.80 per cent to Rs 3,234.6 crore.

 

Growth in non-life insurance premiums has taken a hit ever since the insurance regulator revised the accounting norms for long-term policies from October last year.

 

While the largest general insurer, New India Assurance, reported a 2.09 per cent Y-o-Y increase in premiums, the second-largest, ICICI Lombard General Insurance, saw its premium slip 0.69 per cent Y-o-Y.

 

Among other state-owned insurers, United India Insurance posted a 14.30 per cent Y-o-Y drop, National Insurance saw a 4.10 per cent Y-o-Y growth, while Oriental Insurance’s premiums slipped 8.96 per cent Y-o-Y.

 

For the month under review, all companies have deducted the long-term premiums accordingly for the current year only, following Irdai formats. So, numbers are not comparable.

 

"The growth in premiums for the general insurance sector has been slower this year compared to last year. Apart from the general slowdown in economic activity and vehicle sales impacting premium growth, the growth has also been affected by the 1/N method of accounting, which has been applicable since October 2024, impacting the health and fire lines of business. Further, the increase in the number of policies has been limited. The fire segment has also been impacted due to aggressive pricing," said Neha Parikh, vice president and sector head – financial sector ratings, ICRA.

 

Among the leading private sector players, Bajaj Allianz General Insurance reported a 5.87 per cent drop in its premium, and HDFC Ergo General Insurance’s premiums fell by 34.3 per cent. Meanwhile, among standalone health insurers, Star Health’s premiums rose only 0.92 per cent, while Care Health posted a 4.82 per cent growth in premiums, and Niva Bupa’s premiums rose 26.4 per cent Y-o-Y.

 

“Growth reported by SAHIs has been affected as the base period includes the full long-term premium, while the current month contains premium adjusted for 1/n,” analysts at Nuvama said in their research note.

 

Meanwhile, in April-February 2025, non-life insurers reported 6.6 per cent Y-o-Y growth to Rs 2.8 trillion. General insurers posted 5.7 per cent Y-o-Y growth in premiums during this period to Rs 2.37 trillion, while SAHIs posted 14.55 per cent Y-o-Y growth in premiums to Rs 32,988.41 crore.