India’s non-life insurance market has shown signs of recovery, with total premiums reaching Rs. 24,554.3 crore by the end of August 2024, marking a 4.2% year-on-year (YoY) growth. This uptick follows a decline of 3.7% in the same period last year, according to data from the General Insurance Council and the Insurance Regulatory and Development Authority of India (IRDAI).
The modest growth in the sector was primarily driven by two key segments—retail health and motor own damage (OD) insurance—while the fire and crop insurance categories continued to underperform.
Public vs. Private Insurers: Diverging Trends
Public Sector General Insurers saw their premiums decline by 4.6% in August 2024, contrasting sharply with the private insurers, who posted a 4.7% growth during the same period. This divergence is part of a broader trend observed over the first five months of the fiscal year, with private insurers consistently outpacing their public sector counterparts.
However, it’s worth noting that while private sector insurers are still expanding, their growth rate has slowed compared to the previous fiscal year. Private insurers have benefitted from robust performances in health and motor insurance, although weaknesses in the fire insurance segment have tempered their gains.
Specialized Insurers See Improvement
Specialized insurers experienced a marginal decline of 0.2% in August 2024, a significant recovery from the 68.4% drop recorded in August 2023. For the fiscal year to date (YTD FY 2025), these insurers posted a 6.0% growth, in contrast to the steep 57.7% decline over the same period last year.
Market Share Shifts Toward Private Players
The market share of private non-life insurance companies has continued to rise, reaching 66% in YTD FY 2025, up from 63% in FY 2024 and 61% in FY 2023. Health insurance remains the dominant segment within the non-life insurance space, accounting for 39.2% of premiums in YTD FY 2025, up from 35.4% in YTD FY 2023. However, this share has seen a slight dip from around 40% in YTD July 2024 as other segments have also shown growth.
Slow Overall Market Growth
“The non-life insurance premiums for the first five months of FY25 grew at a moderate pace of 10.5%,” said Saurabh Bhalerao, Associate Director at CareEdge Ratings. “Growth in the sector was tempered by weakness in commercial segments such as fire insurance, alongside a reduction in government health business. This was partially offset by a rise in retail health and motor own damage insurance.”
Bhalerao also noted that standalone health insurers (SAHIs) have outpaced both the overall industry and the health insurance segment in terms of growth. “Industry demand will continue to be driven by the health and motor segments, though competition is intensifying, especially in the health insurance space, as new players enter the market,” he added.
Future Growth Outlook
CareEdge Ratings forecasts that the Indian non-life insurance market will grow at a rate of 13% to 15% over the medium term. This growth will be supported by favorable macroeconomic factors, regulatory developments, and the implementation of the Bima Trinity initiative.
However, challenges remain. Gaurav Dixit, Director at CareEdge Ratings, cautioned that increasing competition and global geopolitical uncertainties could pose significant risks to the sector’s growth trajectory.
As private insurers continue to gain ground in India’s non-life insurance market, their dominance in key segments like health and motor insurance positions them well for future growth. However, the sector as a whole must navigate challenges such as increasing competition and economic uncertainties to sustain its upward trajectory.
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