Fire Insurance Growth Slows During Pandemic, Health Segment Steady

Fire insurance business of non-life insurers grew at a slower pace in the pandemic-hit fiscal.

Gross premium underwritten for fire covers jumped 28.06% to Rs 20,139 crore in the year ended March, according to data filed by the insurance regulator. But growth slowed from 34.8% in the previous fiscal.

For private insurers, fire segment grew 34.38% to Rs 11,737 crore; for their public sector peers it rose 20.16% to Rs 8,402 crore.

This increase could be primarily attributed to upward revision in the rates by Insurance Information Bureau. General Insurance Corporation of India (GIC Re) revised fire insurance premiums from Jan. 1 2020.

Fire insurance segment which includes fire and allied perils including lightning, storm, flood, earthquake, explosion, was plagued by discounting. The insurers charged lower premiums to retain corporate clients despite paying higher claims in the previous year. But after revision in rates, insurers selling policies to GIC Re, India's sole reinsurer, had to pass on higher costs to consumers.

Health insurance growth remained almost unchanged in FY21.

Gross premium underwritten in the segment grew 13.37% in FY21 to Rs 58,584 crore. That compares with a 13.49% increase in the preceding year.

The private sector's gross premium rose 15.88% to Rs 31,312 crore, slowing from the pace of 22.95% in the previous fiscal.

Health segment gross premium of public sector firms grew 10.63% to Rs 27,272 crore in the year ended March 2021. That's more than twice the 4.51% increase in the preceding fiscal.