What is your outlook on India’s general insurance industry? Can you highlight the key high-growth segments and other developments that have materialised post-pandemic?
The Indian general insurance market was significantly underpenetrated at 1 per cent in calendar year 2020 compared with other emerging markets, as for example, China with 1.9 per cent penetration and developed nations like the USA where penetration stands at 9 per cent. This is as per the findings of the Swiss Re 2021 report. The general insurance industry has delivered gross direct premium income CAGR of 15.8 per cent for the last 13 years i.e. FY 2008-21 since de-tariffication and has shown resilience despite the pandemic.
In the recently concluded fiscal, the industry delivered a mixed performance. As per the data published by Society of Indian Automobile Manufacturers (SIAM), new vehicle sales witnessed tepid growth in the private car segment on the back of supply chain challenges. The two-wheeler segment remained far from recovery while the commercial vehicle segment has shown growth supported by underlying demand. Health insurance, on the other hand, contributed significantly to the overall industry growth in line with expectations.
In fact, it is now the largest contributing segment to the gross direct premium income (GDPI) of the industry. The commercial lines witnessed robust growth in sync with the current market environment. The overall outlook for the general insurance industry in India is positive, especially on the back of strong automobile demand, better coverage through health insurance and increased capex by the government as indicated in the Union Budget 2022 along with increased infrastructure activities.
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