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Synopsis

• The domestic non-insurance industry’s total premium grew from Rs. 1.3 lakh crore in FY17 to over Rs. 2.2 lakh crore in FY22 i.e., CAGR of nearly 11.5% driven by rising income level, better product fit, strong distribution channels and rising financial literacy.

• Underwriting losses are expected to improve as the loss ratio is expected to stabilise and expenses of management remain range bound. The brokers would continue to be the largest distribution channel while alternative distribution channels would maintain a growing but small share of the non-life insurance pie. Private sector companies are anticipated to grow faster than their public-sector counterparts. Change in regulations on raising capital in form of both equity and debt, along with expected improvement in profitability will provide access to growth capital for companies to expand.

• The gross premiums of the non-life insurance industry in India are expected to grow at 13%-15% over the medium term backed by supportive regulations and economic activity. Health, which is expected to cross the Rs 1 lakh crore mark, along with motor that is envisaged to reach the Rs 85,000 crore level by FY24, would continue to constitute the primary levers of non-life insurance growth.

Overview

Currently, 30+ companies operate in India as non-life insurers. The public sector accounts for six companies and the remaining are from the private sector. Public sector companies include two specialized insurers, ECGC and Agriculture Insurance Company of India Limited (AIC), and four general insurance companies. Since the industry was opened to the private sector in 2001, it has witnessed several changes (regulatory and structural) and has undergone transformation leading to increased penetration/coverage, rise of multiple channels, and intensifying competitiveness in the market. The industry has also witnessed trends such as increased digital presence, emergence of InsureTech for innovations around customer education & service/ products/ technology/ delivery systems for access. The Indian non-insurance industry’s total premium income grew from Rs. 1.3 lakh crore in FY17 to over Rs. 2.2 lakh crore in FY22 i.e., CAGR of nearly 11.5%. This growth has been driven by rising per capita income, product innovations and customisation, the development of strong distribution channels, and rising financial literacy. In H1FY23, the industry has grown by 15.3 % (on y-o-y basis), compared to 12.6% in H1FY22.

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