Retail health driving growth, motor insurance premiums inching up

The retail health segment is driving the growth in the non-life insurance industry, with motor insurance inching up, albeit slowly. In December, while the retail health segment recorded 24 per cent growth, government health schemes made a comeback as premiums in this segment more than doubled YoY. 

Among other segments, fire insurance has registered 45 per cent growth in December premiums. Motor insurance registered 14 per cent growth in premiums, up from 7 per cent YoY growth in November, 3 per cent YoY growth in October, and 4 per cent YoY decline in Q2FY21.

Increasing new vehicle sales and strong momentum in retail sales during the festive season supported growth.

“A gradual rise in freight volumes and utilisation of rates supported premiums,” according to a report by Kotak Institutional Equities.

Despite the fact that retail health segment growth has been strong in the April-December period of FY21 — with general insurers witnessing 38 per cent rise and standalone health insurers recording 21 per cent growth, taking the industry growth to over 30 per cent — experts cautioned about unsustainability as there is gradual softening in risk aversion among probable customers as Covid cases continue to decline.