Mumbai, Jul 20 (PTI) A tepid 1 per cent growth in motor -- the first growth since April -- coupled with a massive spike in health and fire insurance sales, helped the general insurance industry to clock a full 8 per cent growth in June, says a report.

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Motor cover has been the mainstay of the industry but has been down in the dumps for many a quarter due to the pains in the automobile industry driven by a rash of issues, including regulatory as well as shy customers. The pandemic driven lockdowns have only added more salt to the wounds of the industry.

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The general insurance industry as a whole clocked an 8 per cent growth in premium income in June, excluding crop cover sales. This was driven by a 47 per cent growth in fire, robust 9 per cent growth in health and revival in motor premium to 1 per cent in the month.

The motor cover sales had fallen 23-49 per cent over the past two months, Kotak Securities said in a report on Monday, adding the overall growth was also aided by a 42 per cent growth in retail health and a 61 per cent growth in standalone health insurers sales.

Among key players, SBI General reported strong growth across most segments, while ICICI Lombard revived partially led by motor and health. But Bajaj Allianz was weak across segments.

The motor segment made a muted 1 per cent recovery in the month, improving from 23 per cent decline in May and a steep 49 per cent plunge in April on the back of a tepid increase in new auto sales and higher share of renewals. Auto was down only around 76 per cent in June from the same month last year.

Renewals have increased from trough levels observed in April as traffic volumes gradually increased and overall cash flows improved.

However, in third-party business, private players' premia were muted at 1 per cent, while it was up 8 per cent for state-owned players. In the motor OD segment, state-run insurers were down 6 per cent compared to 2 per cent decline for private players.

“The overall muted environment for new auto sales (industry forecast is flat for PVs, and a 15 per cent decline for two-wheelers and a significant decline for CVs for the year) will continue to put pressure on motor. Additionally, insurers will have to discontinue long-term motor OD policies from August resulting in partial hit on overall growth,” the report warned.

However, the overall growth in health business was moderate at 9 per cent dragged down by a 12 per cent fall in group health and a whopping a sharp 88 per cent plunge in government health premia, shaving of the 43 per cent growth in retail health.

Standalone health insurers reported 46 per cent growth led by a 61 per cent increase in retail. State-run firms clipped at 18 per cent and private saw sales soaring 41 per cent.

Fire insurance premia grew 47 per cent driven by higher retention post rise in reinsurance rates by GIC. GIC had increased property reinsurance rates in March 2019 by an average two times for eight occupancies comprising 35 per cent of industry volume and subsequently, for all 291 occupancies from January 2020. Unlike other segments, PSUs reported strong 68 per cent jump in fire insurance compared to 30 per cent for private peers.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)