The gross direct premium earned by general insurance companies from the motor vehicle industry in the own damage category is likely to reach Rs 38,200 crore mark by the end of 2016-17.
From a level of about Rs 17,000 crore as of 2012-13 thereby clocking a compounded annual growth rate (CAGR) of about 22 per cent, according to a just concluded study by apex industry body ASSOCHAM.
"With a share of over 56 per cent, individual agents are the most preferred choice for issuing of motor insurance policies in India followed by direct business which accounts for about 22 per cent share in this regard," highlighted the study titled ‘Motor Insurance: The way ahead,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
In terms of revenue it is seen that individual agents fetched a gross direct premium worth over Rs 9,200 crore while the brokers generated premium worth about Rs 4,700 crore, noted the study prepared by the ASSOCHAM Economic Research Bureau (AERB).
Motor is the largest component of general insurance market as the motor business continued to be the largest non-life insurance segment with a share of 47.05 per cent of the total premium underwritten within the country and it reported a growth rate of 22.24 per cent, it added.
"The Motor insurance segment in the country is poised to grow in tandem with the growth in automobile industry as newer and faster models are hitting Indian roads along with better and larger road surface as a result of infrastructure development," said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the chamber's study.
"The cumulative effect of increase in road surface and the growth in automobile population should directly impact the growth of motor portfolio of the non-life insurance industry," said Mr Rawat.
"Rising income levels, increased demand for vehicles, growing auto finance market, increasing health awareness and other related factors can together give a major boost to this sector," he added.
Total domestic sales of automobiles growing from over 96 lakh to 1.78 crore during the aforesaid period, motor insurance sector is poised for a strong growth in the coming years, highlighted the ASSOCHAM study.
Another key challenge faced by insurers is that there is not much of data to help them in pricing a risk, pointed out the study.
It must be realized that inefficient processes will lead to dissatisfaction amongst the consumers, noted the ASSOCHAM study.
"An efficient claims process is vital to building brand image and a customer friendly claims process ease of submission and progress tracking is highly valued by customers."