Historically, India has been a country with very low levels of insurance penetration. Only in FY2017, the non-life insurance industry managed to cross the significant milestone of 1% GDP penetration, after hovering at the 0.7-0.8% mark for several years. This has been made possible by the growth of sectors like health, motor and the recent government-introduced crop insurance scheme.
The health and motor insurance segment are both growing at 20%, with health insurance being viewed as the one having more potential for faster growth. This outlook is based on the fact that health insurance is voluntary, while motor insurance is based on the sales of vehicles.
According to data from Insurance Regulatory and Development Authority of India (IRDAI), the premiums from motor insurance rose to ₹13,850 crore, registering an increase of 22% year-on-year. health insurance also displayed impressive growth, moving up by 21% to ₹9,285 crore.
Crop insurance has been one of the star performers for the general insurance industry. The data released by the General Insurance Council says that the industry is now worth ₹1.27 trillion, out of which, premium from crop insurance alone accounts for ₹21,000 crore. The impetus on crop insurance by the government will only lead to accelerated pace of growth.
Through its various initiatives and schemes, the government is hoping to grow this sector by 40-50% within a period of two years. This sector is well on its way to achieving that, as it has increased from ₹5,234 crore in FY15-16 to ₹21,000 crore in FY16-17; a phenomenal growth of 400%.
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