General insurance industry likely to grow 13% in FY26: India Ratings

India’s general insurance sector is poised for a healthy 13% YoY growth in gross written premium (GWP) in FY26, as per India Ratings, marking a steady upward momentum driven more by value expansion than new policyholder additions. This follows an 8.5% YoY growth in FY25, compared to 12.8% in FY24. Analysts noted that rising inflationary trends and firming reinsurance rates in select business lines are expected to support value-led growth. Increasing affordability, innovation, and broader reach will strengthen volume expansion across the sector. 

Standalone Health Insurers (SAHIs) are expected to be key contributors, projected to grow at a robust 21% YoY in FY26. Their share in the overall GWP rose to 41% in FY25 (April–December), supported by heightened post-pandemic health awareness and rising medical inflation—factors driving higher demand and greater sum insured values. Recent price revisions in the health segment also lead to increased policy porting, reflecting a dynamic and evolving consumer base. On the commercial lines front, activity is expected to increase in FY26, encouraged by the government’s sustained capital expenditure push. While public sector insurers are still catching up with the private players, ongoing reforms and strategic capital infusion hold promise. At the same time, insurance penetration in urban India is much higher than in rural India. It requires deeper distribution, the right product-market fit for rural consumers, and improved affordability.  Insurers benefit from stable investment income and capital gains despite pricing pressures, which support underwriting margins and strengthen sectoral return ratios. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.