Page 62 - India Insurance Report 2023- BIMTECH

50 India Insurance Report - Series II

With a density of $90 and a penetration rate of only 4.2% (life and non-life combined), insurance
hasn’t been widely used in major sectors of our economy. Also, the exponential growth of cities, especially
tier-2 and tier-3 cities, due to the increasing migration of rural populations to urban cities would
significantly increase disaster risk exposures and property insurance losses in the coming years.

Figure 3: Projection of Property Insurance Premium - 2030

The property Insurance business has had a very steady trend from 2001 to 2015, moving from 3050
crores in 2001 to 45061 crores in 2014, then really grown more significantly with a premium volume of
94457 crores in 2022 with almost more than 200% growth during the last eight years. Our model predicts
a total property premium of Rs.1,95,000 crore by 2030, as given in the above chart (Figure3). One of the
critical reasons for this segment growth might be the periodical revision of motor third-party liability
insurance premiums by the regulator and the market not finding enough scope in unreasonable price cuts
and premium discounts. This segment would continue to grow bigger as both fire insurance and motor
insurance markets expect an increase in the coverages and the reinsurance premium rates due to rising
natural catastrophic perils. Considering these factors, the property insurance premium would easily exceed
Rs. 2,50,000 in 2030 (the model predicts the optimum premium range of Rs.2,60,000 crore).

3.1.1. Fire Insurance

The Fire Insurance segment has been growing consistently over the years. After the revised premium
rates by the Insurance Information Bureau (IIB -IRDAI), this segment grew significantly over 300%,
reaching the premium amount of Rs. 21,551.03 crore for 2021-22 as compared to Rs.7362.63 crore in 2013-
14. This segment is expected to grow further in the coming years and reach over Rs.30,000 crore in 2030.