Covers for health and fire hazards continued to lead the growth for general insurance companies in August even as demand for motor insurance covers remains subdued due to relatively lower sales of commercial vehicles.
New premiums for the non-life industry climbed 10% in August to Rs 17,630 crore, latest data from the General Insurance Council showed.
While fire premiums grew by 29% in August to Rs 1,180 crore, premiums accrued from health policies rose a quarter to Rs 4,490 crore.
However, motor policies, which are typically the largest portfolio for most non-life companies, registered a 2% degrowth to Rs 5,200 crore in August against the same period last year led largely by a 5% de-growth in motor third party cover, the data showed.
The other crucial portfolio for insurers – crop – in August registered Rs5,300 crore worth of premium up 11% against the corresponding period of last year, the data showed. Meanwhile, for FY21 up to August, the insurance industry recorded marginal growth in premiums of 3.6% with total premium at Rs 73,970 crore largely on the back of 35% growth in fire premiums and 13% growth in health, against the corresponding period in FY20.
Motor registered a de-growth of 16% in this period as of April, May and June saw new vehicle sales crashing to historic lows.
According to industry experts, the industry’s profitability in the September quarter could take a hit due to the sub-optimal performance of motor insurance, as the new rates for third party covers, which account for inflationary price rise in claim settlement, have not been specified by the regulator.
“Claims until the end of August were Rs 2,700 crore, which is about 12% of the gross premium registered in FY21,” according to an ICICI Securities report. “The rising Covid-19 claims coupled with expected normalisation of non-Covid claims can lead to a hike in health premiums.”