India's general insurance industry grew 9% year-on-year in FY26, reaching Gross Direct Premium Income (GDPI) of ₹336,000 crore, according to a report by Boston Consulting Group (BCG). The report, released on Monday, noted that health and motor segments were the fastest growing, with private insurers leading this growth. Gross Written Premium rose 10% year-on-year to ₹344,000 crore. Public sector insurers saw a GDPI increase of 8% year-on-year.
Key Details
BCG's analysis showed a change in underwriting metrics as insurers adjusted pricing and portfolio mix after years of strong growth. The combined ratio for the industry increased by 2 percentage points to 113%. Profit after tax (PAT) fell by 23% year-on-year to ₹10,000 crore. The industry's return on equity (ROE) dropped to 6%, down from 9% the previous year. Health insurance had a negative ROE of -7% as companies invested in retail health distribution and infrastructure.
Background
In a related development, General Insurance Corp. of India (GIC) reported flat net earned premium (NEP) of ₹11,081 crore for Q1FY27. Its domestic gross premium grew by 12% year-on-year. However, GIC's international business fell to 17% of total gross premium, down from 19% a year ago. The insurance regulator's rules require general insurers to cede 4% of their business to GIC. This accounted for 33% of GIC's domestic gross premium in Q1FY27, down from 39% the previous year.
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The growth in the general insurance sector may support stocks of private insurers, especially in health and motor segments, as they benefit from increased premium income. Conversely, regulatory changes affecting GIC's mandatory business could impact its market position. Investors will watch for updates on regulatory developments from the Insurance Regulatory and Development Authority of India (Irdai).
Based on reporting by: livemint.com