motor insurance Rating agency CARE has said in a report that this fiscal year will be helped by increased mobility as the economic recovery picks up pace after the pandemic.

the agency expects motor insurance premium The ratings agency said growth would be about 6% to 8%, driven by any increase in third-party insurance rates and higher auto sales.

“Moreover, given that 57% of vehicles plying on the road are not insured (Insurance Information Bureau of India (MOTOR ARFY19)), bringing a portion of these vehicles under coverage will enhance the growth of the industry,” CARE said.

Motor insurance premium has increased from Rs 15,343 crore in FY 2010 to Rs 67,764.7 crore in FY 21 at a compound annual growth rate (CAGR) of 14.5% as motor vehicles on the road have doubled in the last six years and Third Party Insurance (TPI) has been made mandatory in India.

TPI protects vehicle owners from any financial liabilities arising out of injury or damage to life or property of third parties due to the use of the vehicles.

While the business has grown over the past 11 years, gross premium declined by 1.67% in the fiscal year ended March 2021, due to a slowdown in the auto sector, which has restricted mobility due to the national lockdown in the first half of the year. was influenced by.

To be sure, although motor insurance premiums have increased over the last year, they have not reached the pre-pandemic levels as auto sales are yet to reach the same level.

But there are signs that things are going up in this financial year, for example the gross premium collected in August 2021 rose 5.9% to Rs 23,500 crore from Rs 22,200 crore in August 2020.

Growth suffered in FY21 as well as there was no revision in the existing TPI rates. The annual growth rate for FY10-FY20 was 16.2%, while the growth rate for FY10-FY19 was 17.3%, highlighting the slow growth momentum in the segment over the years.

With a large number of uninsured vehicles in India, digital issuance and online channels are also expected to contribute to the rapid growth in this segment.

Care analysis reveals that 57% of vehicles, mostly two-wheelers, are uninsured as of March 2020, down from 60% as of March 2018, with a higher number of vehicles joining the insurance bucket.