Motor insurance premiums rise while health insurance lags behind

New Delhi: In the first half of the current fiscal year 2023, health insurance premiums declined, but motor insurance premiums increased. Motor insurance premiums have increased due to higher sales of vehicles and increase in third party premiums. The overall non-life insurance industry grew at a rate of 15 per cent in the first six months of FY23 during the forecast period, compared to a growth of over 20 per cent in the first quarter of FY23.

According to data released by the General Insurance Council, health insurance premiums increased by 18.9 percent in the first half of FY23 compared to a growth of 28.8 percent in the same period last year. On the other hand, motor insurance, health insurance continued to grow and saw a growth of 18.9 percent compared to five percent in the same period last year.

In FY22, motor insurance premiums increased by just 4 percent, while health insurance premiums increased by over 25 percent. Health insurance premiums were key to the growth of the general insurance industry during the pandemic years. However, growth in the health segment has now normalized after the pandemic.

In the health segment, the retail health business has registered a year-on-year growth of 14 percent. Retail health insurance has grown by over 17 percent over the same period last year. The group health insurance sector is a growth driver in the health sector as premiums in this segment have increased due to higher treatment costs and higher claims.

Group health insurance now accounts for more than 53 percent of the total health insurance business. It is followed by retail health at 36 percent, government plans at 9.5 percent and foreign medical at 1.3 percent. Demand in the health segment is expected to remain stable despite increased awareness post-Covid, a report said. Motor insurance, which was sluggish for two years, has finally picked up momentum.