Motor, health segments see substantial fall in March for non-life insurers

The (Covid-19) disruption and the subsequent lockdown imposed by the government had a significant impact on the non-life industry’s premiums for the month of March.

The motor and health segment led the decline in premiums for the industry as the month of March saw premium for the industry decline by as much as 9 per cent. Motor segment saw a 7 per cent decline in premiums, while health registered an 11 per cent decline in premiums.

Credit segment’s premiums declined 42 per cent, while premiums in the personal accident segment witnessed 53 per cent decline.

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For the full year, however, the industry registered a 12 per cent growth in premiums with motor and health segments showing marginal increase in premium collection.

According to ICICI securities, industry weakness is expected to continue due to economic slowdown – barring the health segment where increased awareness would generate strong traction. It also said that the non-life industry could go through an inverted V-shaped earnings profile due to low claim ratio during the lockdown, but will eventually face low premium growth in line with the economy amidst a hypercompetitive environment, which would strain FY22 earnings.