Home NEWS Slow auto sales hurt motor insurance business, Auto News, ET Auto

Slow auto sales hurt motor insurance business, Auto News, ET Auto

Bengaluru: With car and SUV sales seeing their sharpest fall in nearly eight years, it is all set to be a bad year for motor insurance too. GIC data shows that motor sales growth fell to 8.8% this March from 14.2% for the same period in the previous year.

TOI reported earlier that all the automobile categories — including two-wheelers and commercial vehicles — had slipped into the negative as nervous buyers stayed out of the market ahead of elections and due to the general economic slowdown.

Motor third-party (TP) sales growth — which is mandatory in India by law and covers accidents caused by the driver/owner to other road users — slowed to 15.4% from 17.6%. That of motor own damage (OD), which is not compulsory and covers damage to self and own vehicle, hit a low of 0.5% from 10.2%.

“Car insurance sales has been more affected by the uncertainty surrounding the outcome of the elections and the sluggish economy. Bike insurance has been slightly better for us,” said Sanjay Dutta, chief underwriting & claims, ICICI Lombard General Insurance Co. Lower demand for motor OD is related to the slowing car sales, said industry sources.

“Motor OD could have fallen more sharply than motor TP because the purchase of new vehicles has slowed. So if only older vehicles are coming for renewal, then the premium amount would be less because of depreciation,” said Dutta.

But the months ahead will remain equally tough as auto manufacturers gear up for price escalation and try to adhere to new emission norms and weakening consumer demand. “Going forward, we expect slowdown to continue as rural demand is not picking up due to the liquidity crisis in the NBFC space and higher monsoon deficit in several parts of the country,” said Mitul Shah, auto analyst, Reliance Securities.

Bike insurance also remains under pressure as two-wheeler sales slipped into the red and scooters saw a demand slowdown for the first time in 13 years. “We are pegging this year’s insurance sales largely from premium renewals from existing bike users,” said a manager from United India Insurance.

Source link

Must Read

2020 Ford Explorer Police Interceptor Hybrid Review – MotorTrend

Ford had some standard hybrids at its test track in Dearborn for us to take a quick spin. Explorers are modified to become Interceptors,...

GWKFest: The Final Roll, A Final Take – Speedhunters

NostalgiaAs you’ve hopefully gathered, the inaugural Golden Week Kyusha Festival featured a beautiful display of old Japanese cars. Going a bit deeper, it was an awesome...

Late In The Day: The Road To Wörthersee – Speedhunters

This has been a pretty wild few weeks of road trips. Ireland to Goodwood, Ireland to Germany, Germany to Belgium and now Germany to Austria. For...

2020 Lincoln Corsair Pricing Starts in High 30s, Can Speed Past $60K | News

We were wowed by the 2020 Lincoln Corsair with its classy styling and interior that bring to a compact SUV the design flourishes of...

All segments production, sales skid to negative, Auto News, ET Auto

New Delhi: The cautious attitude of customers, political uncertainty and negative shadow of tightened liquidity and higher insurance cost dragged down the new vehicle...