The slump in demand for passenger cars due to the economic slowdown has come home to roost for the general insurance industry.
Most insurance majors are redrawing strategy by increasing focus on health, fire and even home insurance policies while reducing their dependence on the auto insurance — till last year, its growth driver.
The figures are clear: in April 2013 the industry grew by 22% over the year-ago period. In May it became 16.3%, and in June it further decelerated to 14.96%.
Motor insurance accounts for 46% of the total business of general insurers, health 26% and fire a distant third with 10%.
“We will bring down our dependence on motor-insurance considerably, increase health insurance and grow fire, engineering and marine portfolio significantly. We aim to register profits continuously quarter-on-quarter in order to show profit for the whole financial year,” said Reliance General Insurance CEO Rakesh Jain.
“With the present economic scenario not very encouraging, the industry is following the same trend. Automobile sales have been battered over the past few months and it has affected motor insurance new business,” said Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.
In India the penetration level in general insurance is just 0.71%, while the global average ranges between 1.5% and 4%.