Churn in insurance: Life is good, non-life is a drag

Life insurers have reported a shrinkage in first-year premiums to finish the quarter ended December at `1.91 lakh crore. The fall, although marginal, might be attributed to Covid-prompted lockdown and enterprise disruption in the primary quarter of this fiscal yr. Demand for medical health insurance helped non-life insurers to tide by means of the robust occasions. That stated, motor insurance is nonetheless struggling resulting from a fall in car gross sales. Smaller non-life insurance coverage classes akin to hearth, aviation and legal responsibility are holding up in all probability as a result of these are a a part of enterprise compliance necessities. Marine insurers will see a revival solely after consignment volumes bulk up. The complete trade is ready for financial headwinds.

Saurabh Bhalerao, affiliate director, CARE Ratings, says: “Life insurance premiums fell primarily due to a base effect as premiums had increased substantially in the previous financial year. The pandemic has stirred up demand for protection plans, while market volatility has hurt linked plans. Life cover and pension products will drive growth for life insurers. The pandemic has increased the awareness of health insurance. Muted growth in the economy and subdued auto sales have impacted motor insurance for now. However, the insurance industry is expected to grow in single digits for the year as compared with a double-digit growth seen last year.”

LIFE INSURANCE

No. of Policies Sold

Renewal Premiums**
in second quarter (Rs cr)

**
Of top-8 insurance coverage firms | Source: IRDAI, CARE Ratings


“The past year underlined the need for life insurance protection more than ever before. This crisis has also been a huge driver for digital transformation”

–
Naveen Tahilyani, MD & CEO, Tata AIA Life Insurance



GENERAL INSURANCE

Only some principal segments have been thought of | Source: IRDAI, CARE Ratings

“The general insurance industry has seen structural changes. There is more interest in retail products and motor is seeing a slight revival. Non-life will generate superior growth in the coming quarters”

–
Ritesh Kumar, MD & CEO, HDFC ERGO General Insurance