26% growth in registered health insurance premiums; 12% of covid-19 claims – ICRA
CIFAR expects gross direct premium income (GDPR) from the general insurance industry to grow 10-12% in fiscal 2023, driven by higher growth in the health and business affairs with increased awareness of medical insurance and an upturn in economic activity.
Already, the recovery in economic activity after the decline in Covid-19 infections has led to a resumption in the industry’s gross direct premium income (GDP) growth of around 11% in fiscal year 2022. (vs. 4% growth in FY21).
GDPI of PSU insurers is expected to grow moderately at 4-6%, while private insurers are expected to capture market share by growing at a higher rate of 13-15% in fiscal 2023. However, uncertainty economic growth due to structural challenges in the automotive industry and rising commodity prices amid the geopolitical crisis poses a downside risk to FY2023 growth.
Giving further insights, Sahil Udani, Assistant Vice President and Sector Head – Financial Sector Ratings, ICRA, said: “GDPI of private sector insurers grew at a faster rate of 14% (E) compared growth of 5% (E) seen by public sector insurers (PSUs) in fiscal year 2022. Health segment gross premium has seen strong year-on-year growth of 26% in the months of fiscal 2022, while the fire segment premium increased by 8% in the 11 months of fiscal 2022, despite partial shutdowns across the country.
After the decline in fiscal 2021, the automotive business recorded moderate growth of 4% in the 11 months of fiscal 2022 on a lower base due to structural challenges in the automotive industry. However, GDPI from agricultural activity declined by 20% in the 11 months of FY2022, primarily due to the significant decline in PSU activity. »
Combined ratio for the entire industry deteriorated to 119% in the 9 months of fiscal 2022, from 112% in the 9 months of fiscal 2021, with an increase in health claims . Covid claims represented 6% of the total number of health claims paid in fiscal year 2021 and are expected to form approximately 11-12% of the total number of health claims paid in fiscal year 2022.
The industry’s combined ratio is expected to improve in fiscal 2023, driven by lower health claims and insurers’ likely improved risk pricing.