India’s non-life insurance industry is poised for steady medium-term growth of 8% to 11%, supported by a strong economic backdrop and sweeping regulatory reforms aimed at expanding insurance access, according to CareEdge Ratings.
The sector’s gross domestic premium (GDP) reached ₹3.07 lakh crore in FY2025, reflecting a robust compound annual growth rate (CAGR) of 10.4% since FY2019. While growth moderated to 6.2% in FY2025 due to new accounting norms and subdued commercial activity, the overall trajectory remains firmly positive.
Health and Motor Insurance Lead Premium Growth
Health and motor insurance continue to anchor the sector, together accounting for 71% of total non-life premiums.
Health insurance has benefited from:
- Rising medical costs
- Greater public awareness
- Deeper penetration into retail segments
Meanwhile, the motor insurance segment is gaining momentum from higher disposable incomes and increasing vehicle ownership.
“Health insurance will continue to anchor growth, supported by rising healthcare costs, improving awareness, and deeper retail penetration,” said Sanjay Agarwal, Senior Director at CareEdge Ratings.
Broader Segment Expansion and Digital Adoption
Beyond health and motor insurance, fire, marine, and export credit insurance are also expected to contribute to growth. Increased digital adoption, product customization, and improved underwriting frameworks are enhancing the competitiveness of these segments.
Efficiency Gains Strengthen Industry Fundamentals
Operational efficiency across the non-life insurance sector has improved significantly. Operating expenses as a percentage of net premiums declined from 27% in FY2019 to 16.6% in FY2025, reflecting better cost controls and digital efficiencies.
Although loss ratios are expected to remain stable, underwriting discipline is improving. CareEdge projects the overall industry loss ratio to ease slightly to between 78% and 82% in FY2026, supporting profitability and balance-sheet strength.
Regulatory Push Accelerates Market Access
Recent regulatory initiatives by the Insurance Regulatory and Development Authority of India (IRDAI) are expected to further accelerate growth. Central to these reforms is the “Insurance for All by 2047” vision, which aims to broaden coverage and simplify market participation.
Key measures include:
- Faster and streamlined product approvals
- Allowing agents to tie up with more insurers
- Simplified registration norms for new insurance companies
These steps are designed to expand access, boost competition, and attract new capital into the sector.
Shifting Market Dynamics
Private insurers continue to gain market share, driven by agile distribution strategies and digital-first models. In contrast, public sector insurers have seen a gradual decline in market share in recent years.
“Strengthening of distribution networks, including digital and online channels, along with better investment yields and an enabling regulatory environment, could support this upward trajectory,” Agarwal added.
Outlook
With regulatory support, improving efficiency, and strong demand drivers—particularly in health and motor insurance—India’s non-life insurance industry appears well positioned to deliver sustainable growth through the coming decade, playing a crucial role in expanding financial protection across the economy.
