Girija Subramanian, CMD, New India Assurance

Till July 2025, 12 insurance companies have issued around 1,600 ISBs as ‘Bid Security’ and 207 ISBs as ‘Performance Security’ valued at around Rs 10,369 crores for NHAI contracts

While the Indian general insurance industry has seen a slow down in major segments like Health, Motor and Crop, new emerging lines like Surety did well but at present it is too small to move the needle, said Girija Subramanian, CMD, New India Assurance, the largest general insurance company in India

New Delhi: Achieving a major milestone in a matter of couple of years, after overcoming initial hitches, Insurance Surety Bonds (ISB) issued by general insurance companies for National Highway Authority of India (NHAI) contracts has crossed Rs10,000 crore landmark.

Till July 2025, 12 insurance companies have issued around 1,600 ISBs as ‘Bid Security’ and 207 ISBs as ‘Performance Security’ valued at around Rs 10,369 crores for NHAI contracts.

NHAI has been encouraging the use of ISBs as an additional mode of submitting Bid Security and/or Performance Security Deposit.

ISBs are instruments where insurance companies act as ‘Surety’ and provide the financial guarantee that the contractor will fulfil its obligation as per the agreed terms.

The Ministry of Finance has made e-BG(bank guarantee) and ISBs at par with BGs for all government procurements. The ISBs, when issued, would be cost effective and provide adequate security for NHAI projects.

As India is poised to become the world’s third largest construction market, the requirement of BGs in the Indian infrastructure sector is expected to grow by 6 to 8 percent year on year basis.

Ashish Kumar Singh, CGM (Finance), NHAI, mentioned, “NHAI has been at the forefront of this transition, having accepted over 1,400 insurance surety bonds to date.

Rajendra Kumar, Member (Finance), NHAI, emphasized the strategic role of surety bonds in India’s infrastructure push, “Surety bonds represent a forward-looking mechanism to unlock liquidity for contractors while ensuring strong financial safeguards for project owners.”

While the Indian general insurance industry has seen a slow down in major segments like Health, Motor and Crop, new emerging lines like Surety did well but at present it is too small to move the needle, said Girija Subramanian, CMD, New India Assurance, the largest general insurance company in India.

“We expect continued surge in demand for health, motor, construction and surety segments,” said N Ramaswamy, CMD, GIC Re.

In a bid to further promote wider adoption of ISBs and Electronic Bank Guarantee, a workshop was organized by NHAI in New Delhi. The session was chaired by Rajendra Kumar, Nilesh Sathe, former member, IRDA.

Senior NHAI officials, industry experts and representatives of various insurance and finance companies participated in the workshop.