When it comes to buying a two-wheeler or a car people generally prefer visiting the showroom or buying through a dealer. The same applies to motor insurance in India.
While the world was grappling amidst COVID-19, almost every industry had to face certain challenges. The prominent challenge has been the consequent lockdown.
In regards to the motor insurance, the businesses were shut down, and the motor insurance sales had dropped. People were not able to visit the car dealer or the car insurance
company. Due to other restrictions and social distancing, there was a slight delay from the insurance company's perspective.
Understanding the Consequence of Pandemic on Motor Insurance in India
The complete lockdown throughout the nation forced all the people to remain indoors. Lockdown was the need of the hour to avoid infection and minimize physical contact. Apart from essential services, the non-essentially business was temporarily closed. Due to this, people were unable to buy vehicles through a dealer or visit the showroom.
As per the report shared by the Federation of Automobile Dealers Associations, a 31% drop in the sales of motor vehicles was noticed in the financial year 20-21 when compared to the past year's financial figure.
The motor insurance policies took a plunge in India. As per an IRDAI report, for June 2020, there has been a mere growth of 1% in motor insurance when compared to 2019, June. There was a 14.04% growth in financial year 19-20 for the motor own damage premium. In financial year 20-21, it was dropped to 13.11%.
The Bottom Line
As people are getting vaccinated and the decline of cases in COVID-19 there is a ray of a better and safe future. This is surely going to have a positive impact on the motor insurance
industry in India. Growth in vehicle sales is expected and more registration in the upcoming times.