With the help of higher growth in health and motor insurance segments, ICRA Ratings in a report said that the general insurance industry is likely to clock a 7-9 per cent growth in gross direct premium income (GDPI) in the financial year 2021-22. In 2020-21, the industry's total GDPI grew four per cent y-o-y to Rs 1.85 lakh crore. the report said while public sector insurance companies were slower to adjust to an online mode of growth, the reliance on physical meetings were higher which resulted in a two per cent y-o-y decline in business (Rs 71,800 crore in FY2021).
As per the report, the private sector companies reported an eight per cent y-o-y increase in gross direct premium income (GDPI) to Rs 1.13 lakh crore in the same period. The analysis is based on the performance of 17 general insurance companies collectively representing 90 per cent of the industry-wide gross direct premium written (GDPI) during the nine month of FY2021. Of the companies analysed, four are from the public sector and 13 from the private sector. The report said the private sector players had a higher growth trajectory in 2018-19 and 2019-20, and have gained market share from the PSU players.
Private sector players were able to adapt to the changing business dynamics in the calendar year 2020 at a faster pace compared to the PSU players. The agency said the private sector, with a relatively better risk framework, was able to increase the market share in the fire segment, and health segment. The sector also has a higher share in crop insurance underwritten in FY2021. The select private insurers (13 private players analysed) are expected to witness high single-digit business growth in FY2022. The agency also expects consolidation among the smaller players in the industry.