Non-life insurers have witnessed 3.6 per cent growth in premiums in the first five months of FY21, a signal that the second quarter (Q2) will be better for the industry than Q1 when firms saw a drop in premiums. Growth was driven by fire, engineering, health, aviation, and liability segments.
In the first five month of FY20, the firms had seen 14 per cent growth in premiums.
Till August this year, the motor segment witnessed 15.7 per cent reduction in premiums, with own-damage premium falling over 17 per cent and third-party premiums declining almost 15 per cent.
Muted growth in the economy and subdued activity in auto sales impacted motor insurance business. Holding the premium rates for motor third-party insurance steady at last year’s level may also have been a contributing factor, say experts.
The health segment, on the other hand, saw 13 per cent in rise, with retail health premiums growing at 33 per cent compared to the 10 per cent growth in group business and a fall of 26.6 per cent and 83 per cent in government schemes and overseas travel insurance, respectively.
According to CARE Ratings, the industry could return to growth in the second or third quarter of FY21. Overall, the outlook is expected to be stable in the medium term.
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