Prolonged dismal trend in auto demand to weigh on general insurance players

Motor insurance accounted for 38% of gross direct premium in FY19

The subdued automobile offtake across segments continued for the seventh month on the trot. Weak sales in May 2019 were on account of higher financing cost, liquidity constraints, and muted consumer sentiment. The prolonged dismal trend in auto demand is negative for the general insurance sector, given the dependence on the motor segment.

According to the General Insurance Council (GIC), the motor segment — own damage (OD) and third-party (TP) — accounted for 38 per cent of gross direct premium income (GDPI) pie of non-life insurers in 2018-19 (FY19).

According to Rakesh Jain, executive director and chief executive officer at