Two insurance stocks appreciated to the tune of 9% on Thursday’s early trades after a report by CareEdge (CARE Ratings) stated that the Indian non-life insurance market would grow by approximately 13-15 per cent over the medium term.
Shares of General Insurance Corporation of India zoomed 9.31% to reach an intraday high of ₹ 169.00 apiece on the National Stock Exchange (NSE). At 12:27 PM, its shares were trading at ₹ 168.05 apiece, up 8.70%.
Meanwhile, the shares of New India Assurance Company spiked 7.05% higher to reach an intraday high of ₹ 117.70 apiece. At 12:34 PM, its shares were trading 4.77% higher at ₹ 115.20 apiece.
According to a report by CareEdge the health insurance segment is on track and it might breach the ₹ 1 lakh crores mark. Meanwhile, motor insurance premiums are expected to cross ₹ 85,000 crores in FY24, they already crossed ₹90,000 crore and ₹80,000 crore mark respectively during the last year.
The rating agency added that an anticipated increase in per capita / disposable income levels, a greater volume of transactions under segments like fire, marine, export credit, customised products, especially in motor and health insurance, gradual introduction of new products, growing demand for motor insurance (third party and owner damage) products and the popularity of health insurance could drive growth in the sector.
Moreover, improving profitability, stabilising loss ratios that had risen during the pandemic, strengthening distribution networks, controlling management expenses due to the regulations around the same and enabling a regulatory environment are likely to support growth.
CareEdge said that the outlook is expected to be stable in the medium term. However, it said that the intensification of competition, an uncertain geopolitical environment and high inflation can negatively impact economic growth and subsequently the non-life insurance sector.
Written by Simran Bafna
