General insurance industry in India to grow at 9.9 per cent by 2026
The general insurance industry in India is projected to grow at a compound annual growth rate (CAGR) of 9.9 per cent from ₹2,172.03 billion ($29.39 billion) in 2021 to ₹3,484.35 billion ($41.78 billion) in 2026
Shabbir Ansari, Senior Insurance Analyst at GlobalData, commented: “General insurance industry in India is poised for a strong recovery in 2022, driven by increase in awareness and demand for health insurance and an economic recovery, which has helped automobiles and property demand reach its pre-pandemic levels.”
Personal accident and health (PA&H) insurance was the largest segment, accounting for 33.8 per cent of general insurance GWP in 2021. It grew by 14 per cent in 2021 due to a surge in demand for health insurance policies following the Covid-19 pandemic. This trend will continue over the forecast period as the PA&H segment is expected to grow at a CAGR of 11.7 per cent over 2021-26.
Motor insurance was the second-largest segment, accounting for 33.3 per cent of GWP in 2021. It registered a sluggish growth of 2.7 per cent due to lower vehicle sales following the economic slowdown and shortage of automobile chips globally. The motor insurance segment is expected to recover in 2022 and grow by 8.8 per cent, in line with recovery in automobile sales.
Property insurance expected to recover in 2022
Property insurance was the third-largest general insurance segment with a 25.4-per-cent share of GWP in 2021. It declined by 5 per cent in 2021 due to a halt in commercial construction activities and decline in housing demand due to Covid-19. There was decline in agriculture insurance premiums due to delays in claim settlements and release of subsidies.
Property insurance is expected to recover in 2022, driven by demand from residential and commercial segments as well as the government’s focus on infrastructure development. According to the Ministry of Statistics and Programme Implementation, the construction sector is expected to grow by 10.7 per cent in 2022. This will support property insurance grow at a CAGR of 9.7 per cent over 2021-26.
Ansari concluded: “India’s general insurance penetration of 0.9 per cent in 2021 is very low compared to the top five countries in the region – South Korea (5.1 per cent), Australia (3.5 per cent), New Zealand (2.1 per cent), Japan (1.8 per cent) and Hong Kong (1.6 per cent). As a result, there is ample opportunities for growth and expansion in the Indian general insurance industry.”