India non-life could rise up to 11% as regulator rewrites access

Insurance for All by 2047 backs faster product clearance and wider agent tie-ups.

India’s non-life insurance industry is projected to grow at a rate of 8% to 11% over the medium term, supported by strong economic performance and regulatory reforms, according to CareEdge Ratings.

The sector’s gross domestic premium reached Rs 3.07 lakh crore in fiscal year 2025 (FY 2025), following a steady compound annual growth rate of 10.4% since FY19. 

Although growth slowed to 6.2% in FY 2025 due to new accounting rules and weaker commercial activity, the industry remains on an upward trajectory.

Health and motor insurance continue to be the primary drivers, together accounting for 71% of all premiums. 

Health insurance has seen a significant boost from rising medical costs and increased public awareness, whilst the motor segment is benefiting from higher disposable incomes. 

“Health insurance will continue to anchor growth, supported by rising healthcare costs, improving awareness, and deeper retail penetration,” Sanjay Agarwal, Senior Director of CareEdge Ratings, said in a report.

Additionally, fire, marine, and export credit insurance are expected to contribute to growth as digital adoption and product customisation expand.

Efficiency in the sector has improved significantly, with operating expenses as a percentage of net premiums falling from 27% in FY 2019 to 16.6% in FY 2025. 

Whilst loss ratios are expected to remain steady, underwriting practices are improving, with the overall industry loss ratio projected to decline slightly to between 78% and 82% for FY 2026.

Regulatory changes introduced by the IRDAI, such as the "Insurance for All by 2047" vision and streamlined product launch systems, are also expected to accelerate market access. 

These reforms include allowing agents to partner with more insurers and simplifying registration for new companies. 

Private insurers continue to gain ground, whilst public sector insurers have seen their market share decline in recent years.

“Furthermore, 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.