Life Insurance Industry Sees 15% growth In August 2023 Amidst Fierce Competition


The non-life insurance sector reported a 15 per cent growth in premiums during August 2023, according to a latest report. Key retail sectors, such as motor and health insurance, continued to exhibit robust growth, hovering around 19-20 per cent. The motor Own Damage (OD) segment in particular showed strong competitive dynamics. Conversely, commercial lines experienced sluggish growth. However, the group health insurance sector emerged as a standout performer, delivering growth and flexibility as the end of the month approached.

Moderate Growth Prevails in the Industry

The non-life insurance industry, excluding crop insurance, reported a 15 per cent increase in premiums, driven by robust growth of 20 per cent in retail health insurance and a moderate 14-16 per cent uptick in group health and motor insurance segments. Insurance providers categorised under the SAHI (Standard Health Insurance) initiative consistently posted strong growth rates of 25 per cent and 33 per cent in retail and group insurance segments, respectively. Private general insurance companies maintained a 54 per cent market share, experiencing moderate growth of 17 per cent (excluding crop insurance).

Motor OD (Own Damage) insurance exhibited strong year-on-year growth at 19 per cent in August 2023 and 21 per cent in the first five months of FY24. This growth was supported by an increase in Average Selling Prices (ASPs) of vehicles, although Third-Party (TP) insurance growth remained subdued at 14 per cent in August 2023 and 17 per cent in the first five months of FY24 due to unchanged TP tariffs.

Strong Growth in Group Health Insurance

The group health insurance segment recorded strong growth of 31 per cent in August and 37 per cent in the first five months of FY24. This segment’s cost-effectiveness provides ICICI Lombard with some flexibility in managing the end-of-month (EoM) ratio. On the other hand, growth in fire, marine, and liability insurance segments remained subdued, with increases ranging from 3 per cent to 8 per cent in the first five months of FY24, likely influenced by the removal of Insurance Information Bureau (IIB) tariffs.

Performance of Other Insurance Companies

Following a sluggish growth rate of 16 per cent in July 2023, Star Health’s retail health insurance segment saw a slight improvement, reaching 18 per cent growth in August. Other SAHI (Standard Health Insurance) players remained aggressive, with Care registering a 56 per cent year-on-year growth and Niva Bupa reporting a 25 per cent increase. Star Health reported a notable 37 per cent growth in group health insurance in August 2023, following the winding down of its corporate portfolio in FY2023. However, it’s important to note that the group health segment includes bancassurance credit-linked products and employer-employee insurance, which may affect year-on-year growth comparisons.

Within this landscape, ICICI Lombard was found to lag behind the overall motor insurance industry growth. Meanwhile, Star Health, although experiencing a sequential decline in retail market share, remained a noteworthy player.

ICICI Lombard’s premium growth, excluding crop insurance, improved from 15 per cent in July 2023 to 18 per cent in August 2023. This overall growth was primarily fueled by a remarkable 31 per cent increase in group health insurance. ICICI Lombard’s market share in the retail health insurance segment, which saw a 19 per cent year-on-year premium increase, remained stable at 2.9 per cent.

However, ICICI Lombard’s motor OD growth, while showing improvement at 17 per cent, still fell short of the industry’s growth rate of 19 per cent. New-age insurance players like Digit and Acko continued to deliver impressive growth rates of 34-54 per cent in August 2023, despite grappling with high expense ratios ranging from 35 per cent to 58 per cent in the first quarter of FY24. This suggests that competitive intensity remains high despite the implementation of end-of-month (EoM) guidelines. Established players such as Bajaj Allianz, HDFC ERGO, and Chola MS have been selective in their market presence, entering and exiting segments based on competitive pressures. Motor Third-Party (TP) insurance growth for ICICI Lombard stood at 13 per cent, compared to 14 per cent for the industry.

Bajaj Allianz General reported strong premium growth of 22 per cent year-on-year, driven by a 42 per cent increase in group health insurance, aligning with ICICI Lombard’s performance. Bajaj also performed well in the motor OD segment, reporting a 26 per cent year-on-year growth in August 2023.

Chola MS experienced a decline in premium growth, falling to 16 per cent in August compared to 24 per cent for the first five months of FY24. This slowdown was attributed to the motor insurance segment, which grew at 17 per cent in August, down from 26 per cent in the first five months of FY24.

HDFC ERGO continued to report muted premium growth of 6 per cent in August 2023, and 8 per cent for the first five months of FY24. The motor insurance segment faced pricing pressure from new-age players, impacting overall growth.

Go Digit continued to scale its motor and retail health insurance businesses, with a remarkable 52 per cent year-on-year growth in motor insurance and a 31 per cent increase in retail health insurance. It now holds a 6.5 per cent market share in motor insurance and a 1.0 per cent market share in health insurance segments.

SBI General reported strong premium growth of 29 per cent YoY in August 2023, driven by a robust pickup in motor insurance, which increased by 35 per cent in August, compared to a decline of 11 per cent in the first five months of FY24.

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