Non-Life Insurance Premiums Snap a 12-month Growth Streak in Sep-24

Will this growth trend continue and how AI will boost business and margin?

CareEdge Ratings estimates that the Indian non-life insurance market will grow at a rate of approximately 13-15% in the medium term. The overall business growth would be supported by macroeconomic factors, a favourable regulatory environment, and the Bima Trinity. Additionally, reports of composite licenses and M&A could alter sectoral dynamics. The overall outlook for the non-life insurance sector remains stable in the medium term. However, intensified competition, and an uncertain international geopolitical environment, could impact the non-life insurance sector.

The non-life insurance premiums fell by 6.5% in September 2024 due to a drop in Fire, crop insurance, and Group health business segments, and underperformance by the public sector insurers and were partially offset by the performance in the retail health and motor segments. The growth for H1 FY25 was muted as commercial segments such as fire remained weak along with a reduction in the government health business, which was offset by a rise in retail health and motor OD. SAHIs have outpaced both the aggregate industry as well as the health segment growth. Further, muted passenger vehicle domestic sales and flat TP tariffs are the primary reasons for the slower growth in motor insurance premiums. Meanwhile, the industry's demand will be sustained by growth in the retail health and the motor segment. Additionally, competition is increasing especially in the health segment as new companies have commenced operations. CareEdge Ratings estimates that the Indian non-life insurance market will grow at a rate of approximately 13-15% in the medium term. The overall business growth would be supported by macroeconomic factors, a favourable regulatory environment, and the Bima Trinity. Additionally, reports of composite licenses and M&A could alter sectoral dynamics. The overall outlook for the non-life insurance sector remains stable in the medium term. However, intensified competition, and an uncertain international geopolitical environment, could impact the non-life insurance sector.

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