Chennai, April 19 : The Indian insurance industry closed FY24 logging a higher growth rate, with the non-life sector growing at 12.8 per cent and the life sector at two per cent over FY23 figures.

'In FY24, the non-life insurance industry reported a premium of Rs. 2.9 lakh crore growing at 12.8 per cent compared to the 16.3 per cent growth reported in FY23,' said credit rating agency CARE Ratings in a research report.

While the motor and health insurance segments drove the growth for the non-life sector, compared to last year's growth rates, there was a decline owing to a fall in liability, crop insurance, and credit guarantee.

Further, for the month of March 2024 as well, the growth rate was comparatively lower as growth in health was offset by slower growth in motor and a fall in the fire insurance segment, CARE Ratings said.

The four public sector general insurers' grew their business by 9 per cent last fiscal (gross direct premium Rs.90,344.5 crore) as compared to 10 per cent growth logged in FY23 (Rs.82,891.3 crore), CARE Ratings said.

The FY24 numbers have demonstrated robust growth which can be primarily attributed to group health and motor insurance.

The specialised insurers logged lower growth last fiscal as compared to FY23 due to the crop insurance premiums of Agriculture Insurance Company reduced by 32.1 per cent for FY24, as select public sector general insurers and a few private general insurers picked up a larger proportion of crop insurance premiums.

The standalone private health insurers (SAHI) continued their growth momentum last fiscal booking a gross premium of Rs.33,116 crore, up from Rs.26,243.9 crore earned in FY23.

Further, with the sectoral regulator approving two SAHIs in FY24, competition is expected to accelerate even further in FY25.

CARE Ratings estimates that the Indian non-life insurance market will grow at a rate of approximately 13-15 per cent in the medium term. The industry's growth will continue to be driven by the health and motor insurance segments as they account for around 68 per cent of the premiums.

Growth would be aided by macroeconomic factors such as higher GDP growth, disposable income levels, anticipated favourable monsoon.

However, intensified competition, an uncertain international geopolitical environment, and elevated inflation could potentially negatively affect economic growth and subsequently impact the non-life insurance sector.

On the other hand, the life insurance sector closed FY24 with two per cent growth in new business premium.

According to Life Insurance Council, the new business premium for the life insurers last fiscal stood at Rs.3,77,960 crore as against Rs.3,70,543 crore earned in FY23.

Following alterations in the taxation of high-value non-linked policies, the life insurance sector encountered a range of challenges during FY24, including a slowdown in growth, said Avinash Singh, Senior Research Analyst, Emkay Global Financial Services Ltd in a report.

Be that as it may, the life insurance industry grew their individual agents base by adding 2,76,850 agents in FY24 alone.

This increase is being complemented by the rapid pace of digitalisation being undertaken by life insurers, auguring well for further increases in insurance penetration that should bolster new business premiums in FY25 and beyond, said the Life Insurance Council.

/IANS