“Strong rebound in automobile sales and improving consumer confidence following the GST rationalisation in the sector, has provided another leg to overall growth. As both health and motor lines, two top portfolios in the industry, are expected to grow at a healthy pace, the industry anticipates a higher insurance penetration and improved premium growth during FY 2025–26, ” Girija Subramanian, CMD, NIA
Mumbai: It seems, the general insurance industry is getting back its much needed mojo after zero GST for retail Health Insurance policies and GST cut for autos were announced by the government in mid-September.
Health Insurance and Motor Insurance business are the two top portfolios of the industry contributing almost 70 per cent of the total premium income of the industry.
After recording a slower growth in single digit till September, when the new GST rules were announced by the government, the industry in overall has seen a kind of rejuvenation in premium income during October(as reflected in the total premium income of stand alone health insurers (SAHIs) only), and November.
Led by state owned New India Assurance(NIA), the largest Indian general insurance multinational, and SAHIs, the industry’s overall monthly premium has surged by almost 25 per cent year- on- year (Y-O-Y) to Rs 26,900 crore.
Seven SAHIs, led by Star Health Insurance, has recorded a 36 per cent Y-O-Y jump in its premium income to Rs 3,710 crore in November.
The total premium of multiline general insurers have soared by almost 22.50 per cent Y-O-Y to Rs 22, 418 crore in November.
One notable feature in the performance of the industry in November is 193 per cent jump(or addition of one time premium of Rs 2636 crore) in Bajaj General Insurance premium to Rs3,999 crore during the month as the company has renewed health insurance account of the Gujarat government.
NIA has grown its top line by 11 per cent to Rs 2780 crore and its market share has increased to 12.84 per cent(the biggest increase in the industry if Bajaj General’s one time premium jump is not taken into account) in November over 12.24per cent in the corresponding month of FY 25.
The removal of GST from health insurance, which is the largest portfolio in the Indian insurance sector, has brought renewed optimism to the industry. It makes health insurance more affordable and accessible for retail customers,’’ said Girija Subramanian, CMD, NIA.
“We have taken a conscious decision to pass on the full benefits of GST cut to retail policyholders. Agents are equally important stakeholders for us and we have decided to not squeeze agency commission to offset the losses we will be incurring on account of non-availability of input tax credit. We believe that growth in new business will be able to offset the losses on account of the new GST regime,’’ added Subramanian.
Strong rebound in automobile sales and improving consumer confidence following the GST rationalisation in the sector, has provided another leg to overall growth. As both health and motor lines, two top portfolios in the industry, are expected to grow at a healthy pace, the industry anticipates a higher insurance penetration and improved premium growth during FY 2025–26, commented Subramanian.
With just 7 per cent growth, ICICI Lombard General Insurance, at Rs2187 crore, has remained cautious in its top line growth.
SBI General Insurance grown its premium by 36 per cent to Rs 1132 crore while Tata General Insurance, at Rs1624 crore, has winessed a 26 per cent jump in its top line in Novemeber.
In terms of year-to-date performance, the report mentioned that public multi-line insurers and SAHIs gained market share by 39 basis points and 70 basis points YoY, taking their shares to 31 per cent and 12.2 per cent, respectively, in FY26 to date.
This increase came at the expense of private multi-line insurers, whose market share declined 160 basis points YoY to 52.9 per cent.
Till October, the industry has grown its Health Insurance premium by 7 per cent Y-O-Y to Rs 76,564 crore(with retail Health Insurance portfolio rising by 11.56 per cent to Rs 28,533 crore) while Motor Insurance premium has gone up 8.41 per cent Y-O-Y to Rs 59,000 crore.
The GST cut for autos (effective Sept 2025) significantly reduced rates which fell from 28 per cent to 18 per cent for small cars, two-wheelers (≤350cc), commercial vehicles, buses, and auto parts, making small cars and commercial transport much cheaper, boosting their demand.
This GST cut just didn’t just lower the purchase price, it also lowered the car insurance premiums. This is because insurance is calculated on car’s insured declared value (IDV), so a lower vehicle price also translated to a reduced IDV, which slightly lowered auto premium. For policyholders, this means long-term savings on both car purchases and insurance protection, said analysts.