The general insurance industry could continue to grow at 13-15 per cent in the medium term with insurance companies looking at diversification in distribution as a key growth driver.

Flash numbers from the General Insurance Council show the gross direct premium underwritten by the general insurers, specialised health and non-life insurance companies grew 16.23 per cent for the nine months ended December 31, 2022 to Rs 1.8 lakh crore from Rs 1.6 lakh crore in the corresponding period previous year.

New India Assurance, the market leader among general insurers, saw a 2.41 per cent year-on-year increase in its premium underwritten to Rs 26,092.47 crore for the first nine months of the current fiscal. However, the insurer’s market share fell to 13.94 per cent during this period from 15.82 per cent a year ago.

“The gross premiums of the non-life insurance industry are expected to grow at 13-15 per cent over the medium term backed by supportive regulations and economic activity. Health, which is expected to cross the Rs 1 lakh crore mark, along with motor that is envisaged to reach the Rs 85,000 crore level by FY24, would continue to constitute the primary levers of non-life insurance growth,” said a report from Care Ratings.

The report said the domestic non-life insurance industry’s total premium has grown from Rs 1.3 lakh crore in FY17 to over Rs 2.2 lakh crore in FY22 at a compounded annual growth rate of 11.5 per cent driven by rising income level, financial literacy and stronger distribution channels.

“A deeper and diverse distribution model will be the key growth driver for the nonlife insurance industry in 2023. Complementary partnerships and digital alliances in distribution will augment deeper penetration into the hinterland of the country,” said Rakesh Jain, CEO, Reliance General Insurance.

“Technological transformation will continue to play a vital role in business transformation even in 2023. Tieups with multiple partners (fintech/insuretech) will be crucial to aid seamless and near-instant services to the customers,” Jain said.

“The non-life insurance industry will also benefit greatly from the regulatory changes implemented and an array of innovations encouraged by the IRDAI. These will inevitably enable insurers to diversify offerings with customized risk solutions and sachet products thereby addressing the evolving and unique customer requirements,” he said.

Insurance regulator IRDAI has introduced changes in the distribution side where the maximum number of tie-ups for corporate agents and insurance marketing firms have been increased.

A corporate agent can tieup with nine insurers — earlier three — and insurance marketing firms with six insurers— earlier two — in each of life, general and health insurance. The area of operation of the insurance marketing firms has been expanded to cover the entire state where they are registered.