October 2023 showed modest growth in the motor insurance business, with competitive intensity on the rise. New-age insurers like Digit and Acko continued to achieve substantial growth rates of 35-38% in motor insurance premiums. Standalone health insurers also demonstrated faster growth, expanding at a pace of 27%, surpassing the growth rate of private general insurers at 19%.
The non-life insurance industry grew at a modest pace of 10% year-on-year in October 2023. The motor insurance business was a driving factor, witnessing mixed growth despite the festive season that typically sees higher car sales. Overall, the premium growth was modest, registering a 9% year-on-year increase.
Analysis by Kotak Institutional Equities revealed that the health business fared better, with 23% retail health growth, driven by standalone health insurers and private general insurers. Within the motor insurance landscape, there was a contrast between the performance of motor own damage (OD) and third party (TP) premiums. The motor OD segment exhibited growth of 12%, while motor TP experienced a decline of 7% year-on-year.
Robust volume growth in the domestic automobile industry also contributed to the motor insurance dynamics, with passenger vehicles witnessing a 17% year-on-year increase and two-wheelers showcasing a growth of 42%.
Kotak’s analysis also suggested that growth patterns in the motor insurance sector seemed to be influenced by several factors, such as lower tariffs or premiums for motor own damage (OD) policies. Meanwhile, the implementation of mandatory 5-year third party insurance for Two-Wheelers in September 2018 may have led to a decrease in renewals for motor third party (TP) policies.
New-age insurers like Digit and Acko continued to display substantial growth rates of 35-38% in motor OD premiums.
In the health insurance sector, there was a 23% year-on-year rise in the retail segment, particularly driven by standalone health insurers. Public sector undertaking (PSU) insurers also posted a growth of 17%, a significant improvement from the previous months. However, the overall performance of group health premiums experienced an 8% year-on-year decline, primarily due to the decline in public sector undertaking (PSU) insurers’ contributions.
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