The Indian Non-Life insurance industry continues to show maturity and resilience over the last 10 years despite facing many operational challenges, since the removal of tariffs. The industry players are well poised to take advantage of the favorable business climate emerging from various Government initiatives to tap the huge untapped potential in the Indian markets in the years to come.
A close study of the performance since 2015-16 discloses that the Indian non-life insurance insurers have maintained steady growth in all facets of performance over the years.
Economic growth of the country, expansion of the associated industries, increasing purchasing power of the middle-class, a growing young working population, increase in number of vehicles, better infrastructure, growth in health awareness and preventive healthcare are encouraging indicators for the Non-Life insurance industry for a positive future trend.
The salient features of the Non-Life industry for the year 2024-25 were:
The fiscal year 2024-25 experienced a GDPI growth of 6.20% as compared to 12.40% the previous year. The growth rate of Non-Life insurance was 6.20% as against the GDP growth rate of 8.40% (at current prices) for the year ending 31st March 2025.
The growth rate has been moderated after excluding long-term premiums (in all classes) as per IRDAI directive in October 2024. Had these long-term premiums been accounted the growth-rate would have been 8.60% instead of 6.20%.
The growth-rates in Medical & Motor premiums declined as compared to last year.
In terms of distribution, brokers have emerged as the largest contributors to GDPI, with their business growing at a faster pace in recent years compared to other major channels such as agents and direct sales.
The industry has increasingly invested in the social and infrastructure sector over the last decade. This year the amount invested is ₹1,27,983 crore.
Key parameters and comparisons:
Macro-economic
Insurance penetration(as a percentage) at current prices rose from 0.70 in 2015-16 to 0.93 in 2024-25. This is a decline from 0.98 in FY 2023-24.
Insurance density nearly tripled from ₹ 724 in 2015-16 to ₹ 2,185 in 2024-25. This is an increase as compared to the previous year.
Industry Growth and Capital Leverage
-Gross Direct Premium Income (GDPI) in India has increased from ₹ 96,379 crore in 2015-16 to ₹ 3,07,633 crore in 2024-25.
-The Yield on Investment stands at 8.85%, reflecting a slight decrease compared to the previous year.
-Capital employed has increased from ₹ 52,579 crores in 2015-16 to ₹ 1,19,727 crores in 2024-25, while Investments have almost quadrupled from ₹1,54,783 crores in 2015-16 to ₹5,69,987 crores in 2024-25.
Operational Parameters
Number of insurance offices increased from 2015-16 till 2018-19, after that the growth plateaued. In 2024-25, the number of offices is 9,862, as compared to 9,928 in 2022-23.
Number of policies issued has increased from 12.60 crores in 2014-15 to 39.01 crores in 2024-25. The growth has been 16.5% over the previous year.
Overall Net retention ratio has decreased from 73.4% in FY 23-24 to 72.4% in FY 24-25
Class- Mix
Health and accident insurance for the highest share of GDPI at 41.4% increase from 40.3% of the previous year, closely followed by Motor Insurance at 32.2%. Health and accident segment has also been growing at the highest rate, with a CAGR of 18.5% over
the period 2015-16 to 2024-25.
Crop insurance is also an important segment contributing majority premiums.
In the fiscal year 2024–25, the Gross Incurred Claims ratio stood at 78.1%, while the Net Incurred Claims ratio reached 82.9%.
Underwriting Results
Underwriting deficit has slight increased this year, with the increase in claims. It is (₹30,288 )crore in 2024-25 from (₹28,587) crore of the previous year.
There was an overall profit (after tax) for the industry for the current financial year amounting to ₹13,155 crore as compared to profit after tax of ₹10,664 crore in the previous year.
In conclusion, the Non-Life insurance industry continues to show maturity and resilience over the last 10 years despite facing many operational challenges, since the removal of tariffs.
The industry players are well poised to take advantage of the favorable business climate emerging from various Government initiatives to tap the huge untapped potential in the Indian markets in the years to come.
The industry will continue to become a more important part of the country’s economic and social fabric. With Government initiatives in various sectors, the industry seeks to create value and tap potential with increasingly better reach, technology, infrastructure, education and awareness.