Non-Life Insurance Growth Slows to 5.2% in June 2025 Amid Policy Changes and Affordability Concerns

The non-life insurance sector in India saw a slower pace of growth in June 2025, with total premiums rising by 5.2% year-on-year to Rs 23,422.5 crore. This is a noticeable drop from the 8.4% growth recorded in June 2024, largely due to the impact of regulatory changes and affordability issues, noted careEdge Ratings report.

"The industry's transition to the 1/n rule, slowing health, and subdued PV growth have affected the industry's performance, partially offset by renewals in the fire and engineering segment," said Saurabh Bhalerao, Associate Director of CareEdge Ratings.

Despite the slowdown in growth, total non-life insurance premiums surpassed Rs 3 lakh crore in FY25. This milestone was supported by favorable regulatory changes, increased use of insurance technology, faster digital adoption, and a growing middle-income population, according to the report.

"The government's Bima Trinity push is poised to accelerate growth in the non-life insurance sector. Standalone health insurers are expected to maintain their dominance in the retail health space. At the same time, the trajectory of motor insurance will closely follow vehicle sales and the upcoming revisions to third-party tariffs.

The proposed rollout of composite licences could reshape the competitive landscape in the medium term. However, rising competition and global geopolitical uncertainties will remain crucial watchpoints for the sector," said Priyesh Ruparelia, Director of CareEdge Ratings.

Public Insurers Outperform Private Rivals

"Public sector general insurers have outperformed their private counterparts for the ninth straight month, largely due to strong performance in fire and engineering, motor third-party (TP), and health insurance renewals. However, private insurers, including Standalone Health Insurers (SAHI)," still control about two-thirds of the market, noted CareEdge Ratings report.

SAHIs saw their growth slow to 10.4% in June 2025, down from much stronger growth in the same period last year. While they continue to expand their share at the expense of private general insurers, their momentum has weakened.

Sharp Decline in Specialised Insurer Premiums

Specialised insurers recorded a sharp 42.5% drop in premiums, mainly due to falling revenues from crop insurance, especially at the Agriculture Insurance Company of India. The ongoing shift of crop business to general insurers has added pressure to these firms. While the overall non-life industry grew, private insurers appear to be grappling with both crop insurance restructuring and solvency concerns.

Health Insurance: Still the Largest, But Slowing

Health insurance remains the biggest part of the non-life insurance sector, but its growth is slowing. Rising medical costs and higher premiums have made it harder for people to afford.

Group health insurance grew by 9.6% this year, down from 20.4% last year, while retail health growth also fell to 9.4%. Standalone health insurers (SAHIs) are focusing on retail customers, while general insurers continue to lead in group plans.

Group insurance growth has been hurt by corporate budget cuts, more claims, and expensive premiums. With more SAHIs expected to join the market, competition is likely to increase.

Other Key Highlights of the Report

• Excluding health, non-life insurance grew by 6.4% in YTDFY26, mainly driven by the motor and fire segments, which made up over 71% of the growth.
• Motor own-damage (OD) insurance rose 5.3%, slower than last year due to weak car sales and competition.
• Motor third-party (TP) grew 11.2%, helped by renewals, and may get a boost from a possible premium hike.
• Fire insurance grew 17.1%, and engineering insurance bounced back with 21.2% growth.
• Crop insurance dropped sharply by 50.4%.
• The "other" segment, including personal accident and credit guarantee insurance, rose 14.8%, with PA premiums jumping 37.8% due to higher awareness and group policy demand.