In the June quarter, growth in the segment stood at around 4 per cent, with premium collection at Rs 15,724 crore against Rs 15,074 crore in the same period of FY19. This was the lowest growth in the last five quarters, starting from Q1FY19.
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The slowdown in the Indian auto industry has cast a shadow on the business of non-life insurers.
The motor insurance segment -- largest contributor to general insurers’ revenues -- has seeing muted growth of late. Hopes of a recovery depend much on an improvement in customer sentiment, which could lead to revival in demand for new vehicles.
Premiums collected from the motor insurance segment contribute close to 38 per cent to the overall collection from various segments, for the non-life industry.
In the June quarter, growth in the segment stood at around 4 per cent, with premium collection at Rs 15,724 crore against Rs 15,074 crore in the same period of FY19. This was the lowest growth in the last five quarters, starting from Q1FY19.
In FY19, the motor insurance segment saw 9 per cent growth, with premium collection at Rs 64,000 crore against Rs 59,000 crore in FY18.
“Most of the manufacturers across private cars, two-wheelers, and commercial vehicles have shown continuous negative sales trend for the past few months. This slowdown has impacted motor insurance adversely, as insurance from new vehicles contributes a significant part,” said Gurneesh Khurana, president and country head (motor business), Bajaj Allianz General Insurance.
While the overall segment saw 4 per cent growth, the own-damage segment in motor insurance declined 2.2 per cent, with premium collection at Rs 6,339 crore in Q1FY20 against Rs 6,546 crore in the same period of FY19.
On the contrary, the third-party premiums have seen 9.3 per cent growth, despite the insurance regulator increasing the premiums recently.
Subramanyam Brahmajosyula, head (underwriting and reinsurance), SBI General Insurance, said: “The notification of increase in motor third-party premiums was issued by the regulator in June 2019 and hence the full impact of the increase will be seen in Q2 onwards.
"However, as the proposed increases are relatively moderate and since motor TP insurance is compulsory, they expect an overall increase in motor insurance premiums”.
“Slowdown in sales of new vehicles has impacted the growth in premiums in the motor insurance segment. However, the expected rise in sales during the festive season should be able to negate the impact of this decline to a certain extent.
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