IRDAI gives indicative premium growth targets to non-life insurance companies

The IRDAI has prescribed aspirational targets for non-life insurance industry, days after doing the same for life insurance companies. The aim is to increase the general insurance penetration to 2.52 per cent by FY27 from the current 1 per cent as of FY21, according to sources.

The regulator wants to increase the general insurance premiums to Rs 11.7 trillion by FY27 from Rs 2.2 trillion as of FY22. In FY22, the non-life insurance industry premiums grew by just 11 per cent over the previous year, data put out by the regulator showed.

According to the IRDAI’s annual report, as of FY21, non-life insurance penetration in the country is just 1 per cent (see box). Insurance penetration is measured as a percentage of GDP.

“The regulator has a vision to see the general insurance market growing from Rs 2 trillion to over Rs 11 trillion, and as a result increase the general insurance penetration. To achieve this, they are looking at making a lot of regulatory changes. The regulator has given individual targets to companies based on their growth and various parameters. The only reason to prescribe targets is to increase penetration. The idea is that coverage should be improved substantially,” said a private sector general executive, who is aware of the development.