According to the Annual Report 2023-24 of the Insurance Regulatory and Development Authority of India (IRDAI), claims ratio(the net incurred claims to net earned premium) of non-life insurance industry declined to 82.52% for the Financial Year 2023-24(FY24), compared to 82.95% in FY23.
- The report showed that the non-life insurance sector underwrote a total direct premium of Rs 2.90 lakh crore in India during FY24, registering a growth of 12.76% from preceding year. This growth is mainly attributed by increased health and motor insurance premiums from individuals.
- India’s insurance penetration was 3.7% in FY24 compared to 4% in 2022-23.
Key Findings:
i.The report highlighted that the contribution of public sector general insurers have increased by 8.88%, from Rs 82,891 crore in FY23 to Rs 90,252 crore in FY24.
- While, private sector insurers, including standalone health insurers, underwrote Rs 1.88 lakh crore in FY24 compared to Rs 1.58 lakh crore in FY23.
ii.The report showed that the combined net profit of the non-life insurance sector was Rs 10,119 crore in FY24 as against a net loss of Rs 2,566 crore in FY23.
- Also, the combined net incurred claims witnessed an increase of 15.39%, from Rs 1.49 trillion in FY23 to Rs 1.72 trillion in FY24.
iii.As per the report, the incurred claims ratio for public sector insurers was 97.23% for FY24 compared to incurred claims ratio of 99.02%Â in FY23.
- While, incurred claim ratio for different insurance sectors for FY24 compared to FY23: private sector general insurers (76.49% as against 75.13%); standalone health insurers (63.63% as against 61.44%); and specialized insurers (66.58% as against 73.71%).
iv.The report highlighted that the life insurance paid total benefits of Rs 5.77 trillion in FY24, accounting 70.22% of the net premium.
- The benefits paid on account of surrenders and withdrawals saw a significant increase of 15.29%, to Rs 2.29 trillion in FY24 of which public sector life insurers constituted 58.36%.
v.The report showed that a total of 18 life insurance companies reported profits during FY24. It revealed that profits of the life insurance industry increased 10.79% in FY24 with Profit After Tax(PAT) of Rs 47, 407 crore compared to Rs 42, 788 crore reported in FY23.
- Public sector life insurers and Private sector life insurers reported an increase of 11.25% and 5.32% in profits respectively, in FY24.
vi.As of March 31, 2024, total industry investments reached to Rs 67.6 lakh crore, an increase 12.6% from Rs 60 lakh crore reported in FY23.
- Of these total investments registered in FY24, life insurers accounted for 91.1%, general insurers, including specialized and standalone health insurers (7%), and reinsurers, including foreign branches (1.9%).
- Public sector entities accounted for 69.5% of the total investments, while the private sector accounted 30.5%.
vii.As per the report, general health insurers settled 2.7 crore health insurance claims worth Rs 83,493 crore. Apart from health insurance, general insurers paid out over Rs 1 lakh crore in claims.
- The private general insurers paid 55% (Rs 55,524 crore) followed by public sector insurers paid 32% (Rs 32, 131 crore) and specialised insurers paid 13%(Rs 13,396 crore).
Other key findings:
i.Decrease in insurance Penetration: The report showed that the overall India’s insurance penetration (the ratio of annual premiums to Gross Domestic Product (GDP))declined for the 2nd consecutive year i.e. to 3.7% during FY24 from 4% in FY23.
- The report highlighted that life insurance penetration saw a marginal decrease to 2.8% in FY24, compared to 3% in FY23 while, non-life insurance penetration remained stable at 1%, the same as in the previous year.
iii.Marginal increase in insurance Density: As per the report, insurance density (which measures per capita premium) increased slightly from USD 92 in FY22 to USD 95 in FY23.
- The report showed that life insurance density remained steady at USD 70, while non-life insurance density increased from USD 22 (in FY23) to USD 25 (in FY24).
- However, it remains far behind the global average of USD 889 reached 7% in 2023, increased from 6.8% in 2022.
iv.Increase in insurance premium: The report revealed that total premiums across all insurance categories reached Rs 11.19 trillion in FY24.
- Of this, premium income of the life insurance industry reached Rs 8.3 trillion in FY24, a 6.1% increase, slower than GDP growth.
- Private sector life insurers registered 15.1% growth in premiums, while the public sector grew by only 0.2%.
Note: As on March 31, 2024, 26 life insurers, 25 general insurers, eight standalone health insurers, 12 reinsurers and foreign reinsurance branches, and two specialised insurers, registered in India.
About Insurance Regulatory and Development Authority of India (IRDAI):
IRDAI was constituted in 1999 and was later incorporated as a statutory body in April 2000.
Chairperson– Debasish Panda
Headquarters-Hyderabad, Telangana
