Last month marked a period of both recalibration and cautious optimism in India’s insurance industry. The latest data reveals that the non-life insurance sector clocked a 6.2% growth in gross direct premiums in FY25—a notable slowdown compared to 12.8% in the previous year. While muted economic activity and the shift to 1/N accounting norms partly explain this, standalone health insurers continued to post a robust 16% growth, reaffirming health insurance’s dominance as a growth engine.
Encouragingly, the crop insurance segment has rebounded, posting higher profitability due to favourable weather and improved risk diversification. This success has prompted re-entry by some insurers, though profitability remains uneven across players.
In a move that will benefit corporates, GIC Re has announced a 15% cut in terrorism insurance premiums from April 1, while reinsurance renewal rates are expected to drop up to 10% in FY26. Both trends point to improved loss ratios and higher risk capacity, offering cost advantages to primary insurers.
A significant regulatory push came via the IMF–World Bank FSAP report, urging India to transition swiftly to a risk-based capital and supervision framework. This aligns with IRDAI’s broader reform agenda, reinforcing long-term sectoral stability.
However, motor third-party insurance continues to pose distribution challenges, with insurers struggling to meet IRDAI’s aggressive growth targets amid low customer demand and data constraints.
On the operational front, ICICI Lombard’s Q4 results reflected pressure, with a 1.9% dip in profit amid subdued commercial lines and regulatory impacts on premium booking.
Collectively, these developments underscore a sector that is maturing, recalibrating to regulatory evolution, and increasingly data-driven. As India gears toward “Insurance for All by 2047,” balancing growth ambitions with regulatory discipline and customer-centricity remains the industry’s key challenge.
