The non-life insurance industry growth was moderate at 15% in August 2023.
The non-life insurance industry growth was moderate at 15% in August 2023. Core retail segments such as motor and health continue to report strong growth of 19-20%, with continued competitive intensity in motor OD. Commercial lines reported muted growth. Group health remains the saving grace, delivering growth and flexibility on EoM. ICICI Lombard continues to trail motor industry growth. Star Health has lost retail market share although is better sequentially, according to an insurance report by Kotak Institutional Equities.
The non-life insurance industry reported 15% premium growth (ex-crop) driven by strong 20% growth in retail health and moderate 14-16% growth in group health and motor segments. SAHI players continued to post strong 25%/33% growth in retail/group segments. Private GI players maintained 54% market share with moderate 17% growth (ex-crop). Motor OD growth has been strong at 19% yoy in August 2023 and 21% in 5MFY24. Increase in ASPs of vehicles has supported motor OD growth, while flat TP tariffs resulted in muted TP growth (14% in August 2023 and 17% in 5MFY24), adds the report by Kotak Institutional Equities.
Group health remains driver
ICICI Lombard’s ex-crop premium increased to 18% in August from 15% in July 2023. The improvement in overall premium growth was driven by a 31% increase in group health. ICICI Lombard’s market share in the retail health segment (premium up 19% yoy) remains stable at 2.9%.
Motor OD growth has picked up to 17% (from 11-15% in past two months), still lower than the industry growth of 19%. New-age players such as Digit and Acko continue to deliver 34-54% growth in August 2023 (despite high expense ratios of 35-58% in 1QFY24); as such, competitive intensity does not seem to have receded despite implementation of EoM guidelines. Other established players such as Bajaj Allianz, HDFC Ergo and Chola MS have been selective, entering and exiting the market based on the competitive pressures. Growth in motor TP for ICICI Lombard was 13% as compared to 14% for the industry, as per the report by Kotak Institutional Equities.
Strong group health growth—31% in August and 37% in 5MFY24—and the segment's low costs will give ICICI Lombard some wiggle room on managing the EoM ratio. Growth in fire, marine and liability was muted at 3-8% in 5MFY24, likely reeling under some pressure from the removal of IIB tariffs.
Following sluggish growth of 16% in July 2023, Star Health's retail health growth inched up to 18% in August. Other SAHI players remain aggressive—Care grew 56% and Niva Bupa 25% yoy. After running down its corporate portfolio in FY2023, Star Has reported 37% growth in group health in August 2023 and 31% in 5MFY24. Group health includes bancassurance credit-linked products as well as employer-employee insurance; as such, yoy segmental growth may not be accurate.
Other companies
The report by Kotak Institutional Equities further provides company-wise updates:
