Non-life insurance industry may register double-digit growth in 2025

Despite flat general insurance penetration in the country, the non-life insurers are expecting to register double-digit growth in 2025 with a conducive regulatory environment and launch of innovative products catering to specific customer needs, stakeholders said on Thursday.

The industry is also expected to meet this expectation if it receives a favourable outcome on GST relief and a revisit of motor third-party rates, a top private insurer said.

"While health insurance will continue to drive growth in the coming years, there will likely be significant expansion in non-motor and non-health segments, such as pet insurance, liability, professional indemnity, and housing insurance," Future Generali India Insurance Company Ltd managing director & CEO Anup Rau said.

The industry estimates a 14 per cent annual growth rate and is expected will witness significant developments as the sector "emerges as a true partner in progress, integrating digital fabric, delivering hyper-personalised solutions, and harnessing the power of data to mitigate emerging risks", he said.

HDFC ERGO General Insurance Managing Director and Chief Executive Officer Anuj Tyagi emphasised the need to make insurance affordable and accessible.

"We anticipate increased innovation in product development, underwriting, and customer servicing, which will play a crucial role in deepening the reach of insurance to citizens not only from urban cities but also from tier 2 and 3 locations.

Bajaj Allianz General Insurance MD & CEO Tapan Singhel said the insurance industry is set to undergo transformative shifts, emphasising personalised and proactive offerings driven by digital innovation.

"Cyber insurance is expected to gain prominence alongside the adoption of parametric insurance for disaster management and surety bonds as alternatives to traditional bank guarantees in infrastructure projects," he said The Insurance Regulatory and Development Authority of India (IRDAI), in its latest annual report, said that the insurance density in the non-life industry has increased to USD 25 up from USD 22 in 2022-23.

The insurance density is a measure of a country's insurance sector development, calculated as the ratio of premiums collected by companies to the country's population.

Rau pointed out that the industry will require support, particularly around GST and motor third-party rates to reverse the trend.

"Removing GST on health insurance would make it more affordable, driving higher penetration and reducing the government's burden to provide coverage. Motor third-party premiums have been unchanged for five years, these rates need to be revised," he pointed out.

Investment analysts are also banking on insurance stocks projecting growth due to the high probability of GST relief.

Rau highlighted the importance of leveraging digital public infrastructure (DPI) to reduce costs and extend essential insurance products to underserved areas.

Initiatives like 'Bima Sugam', 'Bima Vistaar', and 'Bima Vahaks' will pave the way.

According to a reinsurance major Swiss Re report, the insurance sector in India is projected to grow the fastest among the G20 countries, with the total premium estimated to grow at an average of 7.1 per cent as compared with the global average of 2.4 per cent between 2024 and 2028.