India’s non-life sector bags double-digit growth

It saw its premiums surge 14.9% in May.

The non-life insurance industry in India saw its premiums climb 14.9% year-on-year (YoY) in May to Rs20,908 crore. This was, however, slower than the 18.1% seen in the same month last year.

Thanks to its health and motor insurance segments, the overall industry was bosltered. On the other hand, fire insurance business saw a more “subdued” YoY growth of 4.2%.

Health insurance remains the primary growth driver, increasing its market share from 39.6% in year-to-date in fiscal year 2023 (YTD FY23) to 41.3% in YTD FY25. 

However, this share is expected to slightly decrease as other sectors grow. The health segment grew by 16.9% in YTD FY25, down from 22.6% in YTD FY24.

Excluding health, the non-life insurance industry grew by 15.7% in YTD FY25, compared to 16.7% when health is included. 

This growth is largely attributed to motor insurance, which makes up about 50% of non-life insurance excluding health. Motor insurance premiums reached Rs14,035.2 crore in YTD FY25, growing at 15.4% compared to 23.1% in YTD FY24.

FY25 started strong with a 14.9% growth in May 2024. The first quarter typically accounts for about 20% of the sector's premiums, a trend expected to continue in FY25. 

“The industry's demand will be sustained by robust growth in the health segment as well as in the motor segment Additionally, competition is slated to rise especially in the health segments as new companies have commenced operations while others continue to be in line to enter the segment,” said Saurabh Bhalerao, Associate Director, CareEdge Ratings, in a media release..

Indian non-life insurance market will grow at 13% to 15% in the medium term, supported by macroeconomic factors, favourable regulations, and the Bima Trinity. 

“Further, a focus on containing overall expenses and strengthening distribution networks is also anticipated to contribute to the sector's growth. 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 potentially affect economic growth and subsequently impact the non-life insurance sector.” said Gaurav Dixit, Director, CareEdge Ratings.