Motor third-party insurance growth slows to 9%; Kotak flags possible impact of SC compensation ruling

New Delhi: Growth in motor third-party insurance premiums remained sluggish at 9 per cent year-on-year in September 2026, with insurers possibly reducing their focus on the segment following a recent Supreme Court ruling on compensation for homemakers in motor accident cases, according to a Kotak Institutional Equities research report.

The Supreme Court, in a June 2026 ruling, recognised the economic value of unpaid domestic work performed by homemakers while determining compensation in motor accident cases. The ruling has implications for motor third-party insurers, which are responsible for compensating eligible victims and their families in accidents involving insured vehicles.

The report, titled "Insurance: Stable trends; decline in fire moderates," highlighted that motor third-party insurance continued to lag behind other segments of motor insurance, raising questions about insurers' willingness to expand the business amid concerns over compensation liabilities.


"The motor TP business remained slow at 9% yoy growth in September 2026," the report stated.

Kotak noted that most private insurers had witnessed slower growth in the segment, with SBI General Insurance emerging as an exception.

"One of the probable reasons for slower growth may be lower focus on most players in this segment, following the recent court ruling on third-party compensation for homemakers," the report stated.

The difference in growth rates was visible across motor insurance categories.

According to the report's segment-wise premium data, motor own-damage insurance premiums grew 17 per cent year-on-year in September, compared with 9 per cent growth in third-party insurance premiums. Overall motor insurance premiums increased 13 per cent during the month.

While third-party insurance covers legal liabilities arising from injury, death or property damage caused to others, own-damage insurance covers damage to the policyholder's vehicle.

The report also highlighted differences in performance among insurers.

"Almost all the private players went slow, excluding SBI GI (up 32% yoy versus 11-20% in the last two months)," Kotak stated.

SBI General's stronger growth contrasted with the relatively subdued performance of most other private insurers in the third-party segment.

The broader non-life insurance industry, excluding crop insurance, recorded 14 per cent year-on-year premium growth in September and 12 per cent during the July-September quarter.

The divergence highlights the relatively weak growth in compulsory motor third-party insurance even as other insurance segments continue to expand.

Kotak's assessment suggests that the financial implications of motor accident compensation rulings could be an important consideration for insurers. However, the extent to which these liabilities are influencing their business strategies remains uncertain.