India’s general insurance industry posted an increase of 5% in gross premium to Rs. 1,987 billion ($26.5 billion) in the financial year ended March 31, 2021.The growth was due to a boost from health insurance business which was propelled by the COVID-19 pandemic and jumped by 11% to Rs. 585.84 billion in FY21.
The general insurance sector could have crossed the Rs. 2 trillion mark in terms of gross premiums but for negative growth in motor insurance – the largest portfolio in the industry – and crop business. According to figures compiled by the General Insurance Council and IRDAI, premiums in the overall motor portfolio fell by around 2% to Rs. 677.9 billion, while the crop business declined by 3.5% to Rs. 311.8 billion in FY21. In the motor portfolio, motor third party (TP) premium, which was not increased by the IRDAI in FY21, grew by 5% to Rs. 106.5 billion.
The fact that premiums in motor OD and motor TP insurance increased in FY21 despite the COVID-19 pandemic, when a long lockdown period limited the use of vehicles, suggests more people had bought automobiles and more previously uninsured vehicles were insured.