Non-life insurers report gross direct premium of Rs 15,855 cr in October


Motor vehicle construction insurance is compulsory, the premium being set by the regulator on an annual basis.

Non-life insurers reported a gross direct premium of Rs 15,855.11 crore in October, down 0.42% year-on-year. However, auto insurance, which was going through a difficult period in recent months due to declining new vehicle sales, saw its premiums rebound in October. The rate of growth of health insurance has slowed down due to the fall in collective health premiums.

Data from Kotak Institutional Equities shows that the gross direct premium for auto insurance was Rs 7,183.5 crore in October, compared to Rs 6,954.1 crore in the same month last year, a growth of 3%. Auto insurance, which has two segments – auto damage (OD) and auto third party (TP), also saw growth in October.

ALSO READ  New business premiums for life insurers drop 27% in November

Motor vehicle construction insurance is compulsory, the premium being set by the regulator on an annual basis. Insurers, for their part, set their own prices for OD and individual accident cover. The gross direct premium for the TP engine was Rs 4,306.4 crore in October, up 4% from Rs 4,139.4 crore in October last year. Premiums for the OD engine increased 2% to Rs 2,877 crore during the month under review.

“Strong festive demand and a gradual increase in freight volumes and utilization rates supported premiums. Auto premiums have gradually improved from the lows seen in April and May and are likely to improve further, ”the Kotak report says.

ALSO READ  Quitting Trump administration would be 'dereliction of duty' amid Covid pandemic, Medicare chief Verma says

Auto insurance is an important segment of the non-life industry as it holds a market share of around 30% of overall premiums.

Health insurance also saw its premiums increase in October. Gross direct premiums for health insurance stood at Rs 4,074.8 crore, compared to Rs 3,840.6 crore in the period of the previous year, with a growth of 6%. Retail healthcare saw a 30% increase in premiums to Rs 1,982.6 crore. In recent months, the pace of growth in retail health care has slowed, market participants said.

“A slowdown in retail health growth was likely an interaction between the slowdown in daily new cases of Covid in India and declining volumes during the holiday season. Stand-alone health insurers reported a 32% year-on-year increase in health premiums, driven by a 43% year-on-year increase in the retail health sector, ”the Kotak Institutional Equities report states.

ALSO READ  SBI Life launches `` Smart Future Choices '': check insurance plan features, benefit options

Do you know what it is? FE Knowledge Desk explains each of these and in more detail at The Bharat Express News Explained. Also get live BSE / NSE stock quotes, latest mutual fund net asset value, top equity funds, top winners, top losers on The Bharat Express News. Don’t forget to try our free income tax calculator.

The Bharat Express News is now on Telegram. Click here to join our channel and stay up to date with the latest news and updates from Biz.