Despite stagnant general insurance penetration in India, the non-life insurance sector is set to experience double-digit growth in 2025. Industry leaders are confident that with a supportive regulatory framework, innovative product offerings, and digital transformation, they will drive growth even in a challenging environment.

A key driver of this optimistic growth forecast is the health insurance sector, which is expected to remain a significant contributor. Alongside health insurance, emerging segments like pet insurance, liability insurance, professional indemnity, and housing insurance are gaining traction. These segments are responding to changing consumer needs and will support the 14% annual growth expected across the industry. Mr. Anup Rau, Managing Director & CEO of Future Generali India Insurance, emphasized that digital integration and hyper-personalised solutions will play a crucial role in addressing emerging risks and providing the level of coverage that customers expect in an increasingly complex risk environment.

One of the major factors contributing to this growth is the potential favorable Goods and Services Tax (GST) outcome, which could further enhance affordability, particularly in health insurance. Industry executives also hope that a review of motor third-party insurance rates will improve the market conditions. HDFC ERGO MD & CEO Mr. Anuj Tyagi emphasized the importance of innovation in product development, underwriting, and customer service to increase accessibility of insurance in tier two and three cities, a critical market for the growth of non-life insurance.

Another key trend in the non-life insurance sector is the rise of cyber insurance as a response to the increasing number of cyber threats and parametric disaster insurance, which provides quick payouts based on preset parameters, especially in the wake of natural disasters. Mr. Tapan Singhel, MD & CEO of Bajaj Allianz, highlighted transformative shifts in the sector, noting the growth potential of surety bonds for infrastructure projects, which offer security in large-scale projects and provide financial backing for contractors.

The Insurance Regulatory and Development Authority of India (IRDAI) has reported that non-life insurance density rose to Rs. 2,143.98 (approximately US$ 25) in the year 2022-23, compared to Rs. 1,886.70 (around US$ 22) in the previous year. This rise signals positive growth for the sector, demonstrating an increasing adoption of non-life insurance products by the Indian populace.

The potential removal of GST on health insurance premiums could significantly improve the affordability of policies, especially in a market where health insurance coverage remains limited. Furthermore, the expected stability of motor third-party premiums for the next five years could contribute to a more predictable and favorable environment for non-life insurers.

Analysts have also pointed out that insurance stocks could see positive movement if GST relief comes to fruition. This would benefit both consumers and insurance providers, as the affordability of insurance products would likely rise.

Initiatives like ‘Bima Sugam’ and ‘Bima Vistaar’ are part of the government’s drive to expand insurance coverage in India, aiming to increase penetration in both urban and rural areas. These initiatives are designed to simplify the insurance process, making it more accessible and affordable for a broader population.

According to Swiss Re, India’s insurance sector is expected to grow at a rate of 7.1% annually between 2024 and 2028, the fastest among G20 nations, far outpacing the global average of 2.4%. This growth trajectory positions India as a global leader in the insurance market, with a high growth potential in the years to come.

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