India’s Non-Life Insurance Industry Experiences Flat Growth in FY 2025
India’s non-life insurance sector recorded minimal growth in the fiscal year ending March 2025 (FY 2025), despite crossing the Rs3 lakh crore premium mark. The industry’s performance was impacted by several factors, including the shift to the 1/n rule, low growth in passenger vehicle (PV) sales, and continued weakness in commercial insurance lines.
In March 2025, the industry posted a marginal year-on-year growth of 0.2%, significantly lower than the 9.9% increase recorded in March 2024. The transition to the new accounting rule and subdued PV growth were key contributing factors to this slowdown. While performance in general insurance declined, it was partially offset by gains from Standalone Private Health Insurers (SAHIs).
According to Saurabh Bhalerao, associate director at CareEdge Ratings, the flat performance reflects pressure from both structural and market factors. CareEdge Ratings director Priyesh Ruparelia noted that while crossing the Rs 3 lakh crore threshold is notable, the slowdown highlights the need for renewed efforts to drive growth.
Ruparelia added that regulatory support and the Bima Trinity framework are expected to aid expansion, with SAHIs continuing to lead the retail health segment. Growth in the motor segment will depend on vehicle sales and third-party tariff revisions. The industry will also need to navigate challenges such as competition and global geopolitical uncertainties.
The non-life insurance industry’s performance in FY 2025 underscores the complexities facing the sector. While there are challenges to overcome, industry experts believe that with the right regulatory support and strategic initiatives, the sector can regain momentum and achieve sustainable growth.
