The yearbook 2021-2022 has been developed with the objective of presenting a comprehensive analysis of the Indian Non-Life Insurance Market to the stakeholders in the industry, keeping with the traditions of the previous year’s yearbooks.

Each chapter of the yearbook has been specifically organized to focus on different aspects of the Indian non-life insurance industry. Covering macro-economic and insurance indicators, state-wise penetration and density, Industry Business Highlights, Segmentwise Business Highlights, Underwriting results, Customer Service and Reinsurance. The annexures include data tables and information on the working of the companies.

(Data sources include the GI Council, the Regulator, Non-life Insurance Industry companies and their annual reports and public disclosures. Complaints data for the year 2021-22 has been obtained from IRDAI for the chapter on Service indicators. Economic data has been sourced from RBI and various government sources.)

The previous year, 2020-21 had been a global watershed year due to the pandemic. Various economic indicators globally and nationally had shown anomalies as compared to the previous decade. Thankfully 2021-22 has been a comeback year for most of the parameters. The economic variables like GDP, Industry, Services, Exports, and Imports have all recovered from the slump and posted significant growths. The recovery has been reflected in the Non-Life Insurance Industry as well.

A close study of the performance of players since 2012-13 discloses that the Non-Life Insurers have maintained a steady growth and solvency margins over the years. Economic growth of the country, expansion of the associated industries, an increasing purchasing power of the middle-class, a growing young working population, increase in personal and commercial automobiles, better infrastructure, growth in health awareness and preventive healthcare are encouraging indicators for the Non-Life Insurance industry for a positive future trend. Use of advanced technologies, strengthening of the online distribution contribute holistically to the growth engine, insurance awareness and added customer satisfaction and ease.

The salient features of the non-life industry for the year 2021-22 were:

  • 2021-22 exhibited a significant 11.1% GDPI growth in comparison with the 5.2% of the previous year 2020-21.
  • From a geographical point of view, among the top 10, certain states like Karnataka, Gujarat, Delhi, Madhya Pradesh, and Haryana have contributed substantially more growth than the national average of 11.1%.
  • From a distribution point of view, business through brokers has been the largest contributor to GDPI, and it is growing at a faster rate in the recent years than the other big contributors viz. Agents and Direct.
  • From a product perspective, Health and Personal Accidents insurance premium has increased significantly this year, which is also the largest contributor of GDPI.
  • One of the most noticeable features of 2021-22 has seen significant increase in claims, both in number and amount. One reason could be the spike in COVID claims following the second wave in April 2021.
  • Recruitment has started increasing again, the total employee number in 2021-22 stands at 153,916. The industry absorbed 10,972 new personnel in the current fiscal.
  • The industry has been increasingly investing in the social and infrastructure sector over the last decade. This year the amount invested is ₹92,082 Cr.

Key parameters and comparisons:

Macro-economic:

  • Insurance penetration (in percentage) at current prices has been increasing steadily over the last decade, from 0.70 in 2012-13 to 0.93 in 2021-22, though this year there is a dip from last year’s 1.01.
  • Insurance density has increased almost three-folds from ₹ 560 in 2012-13 to ₹ 1,563 in 2021-22. This year it has increased from ₹ 1,466 in the previous year.

Industry Growth and Capital Leverage:

  • Gross Direct Premium Income (GDPI) in India has increased from ₹69,186 Crores in 2012-13 to ₹220,700 Crores in 2021-22.
  • Yields on investment income have decreased for the last four years, this year it stands at 8.49% this could be partly due to reduction in interest rates.
  • Capital employed has increased from ₹37,225 Crores in 2012-13 to ₹92,527 Crores in 2021-22, while Investments have almost quadrupled from ₹105,888 Crores in 2012-13 to ₹413,268 Crores in 2021-22.

Operational Parameters

  • Number of Insurance offices increased from 2012-13 till 2018-19, after that the growth plateaued. In 2021-22 the number of offices were 10,786.
  • Number of policies issued has increased from 10.92 Crores in 2012-13 to 26.79 Crores in 2021-22. The growth has been 6.9% over the previous year.
  • Overall net retention ratio has increased from 71.1% in FY 20-21 to 72.0% in FY 21-22.
  • Number of claims paid has increased to 5.89 Crores in the year 2021-22 as against 4.2 Crores of the previous year, which is a rise of 38.9% this highlights the effective claim settlement by the industry.

Product Class Underwriting and Profitability Results

  • Health and accident insurance accounts for the highest share of GDPI at 36.5% increased from 32.1% of previous year, closely followed by Motor Insurance at 31.9%. Health and accident segment has also been growing at the highest rate, with a CAGR of 18.64% over the period 2012-13 to 2021-22. Crop insurance is also an important segment contributing majority premium in Other Misc.
  • Underwriting deficit has once again increased this year, reversing the trend of last three years, with the increase in claims. It is (₹28,498) Cr in 2021-22 from (₹19,441) Cr of previous year.
  • 2021-22 has seen significant increase in claims, affecting various profitability margins. Gross Incurred Claims ratio (defined as Gross Incurred Claims to Gross Written Premium) increased to 77.9% for the current financial year as compared to 71.6% in the previous year.
  • Due to build-up of claims and higher pay out in respect of COVID claims, profitability of the industry was affected. There was an overall loss (after tax) for the industry for the current financial year amounting to ₹2842 crores as compared to profit after tax of ₹3869 Cr in the previous year.

Service Indicators

  • The number of customer complaints has come down from 78,927 in 2012-13 to 65,515 in 2021-22.
  • Relative measure of complaints to a number of policies issued has come down from 0.07% in 2012-13 to 0.02% in 2021-22.

Conclusion

The Non-Life Insurance industry continues to show maturity & resilience despite facing various hurdles including setback due to the COVID-19 pandemic. The resilience, robustness and elasticity have been reflected in the numbers of 2021-22. The industry will continue to become a more important part of the country’s economic and social fabric. With Government initiatives in various sectors, the industry seeks to create value and tap potential with increasingly better reach, technology, infrastructure, education, and awareness.