The industry’s combined ratio deteriorated by two percentage points to 113%, while profit after tax (PAT) declined 23% YoY to ₹10,000 crore. Return on equity (ROE) fell to 6% from 9% a year earlier.
Mumbai:India’s general insurance industry grew 9% year-on-year (YoY) in FY26, with gross direct premium income (GDPI) reaching ₹3.36 lakh crore, according to Boston Consulting Group’s (BCG) General Insurance Sector Round Up.
Gross Written Premium (GWP) rose 10% to ₹3.44 lakh crore during the year.
The report, which analyses 34 general insurers including seven standalone health insurers (SAHIs), said private insurers continued to lead market expansion, with GDPI growing 10%, compared with 8% for public sector insurers.
Health insurance emerged as the fastest-growing segment, with growth accelerating to 17% for the full year from 10% in the first half, following GST rationalisation. Standalone health insurers also increased their share of industry GDPI by two percentage points, supported by continued momentum in retail health insurance.
However, underwriting performance reflected a period of recalibration following several years of strong growth. The industry’s combined ratio deteriorated by two percentage points to 113%, while profit after tax (PAT) declined 23% YoY to ₹10,000 crore. Return on equity (ROE) fell to 6% from 9% a year earlier.
Private insurers demonstrated resilient underwriting throughout the year, holding their combined ratio broadly steady at 109% (a marginal 0.4-point improvement) and their ROE near 9% (down just 56 basis points). Large private insurers were the standout performers, combining 7% premium growth with a 2–3 point improvement in both loss ratio and combined ratio, and lifting ROE to 15% from 14%, highlighting that scale and underwriting discipline can go hand in hand.
Despite strong growth, health insurance recorded an industry-wide ROE of -7% in FY26 as insurers continued to invest in retail distribution and infrastructure.
Motor insurance grew close to 9%, although renewal-heavy portfolios limited insurers’ ability to fully capture the 10.4% increase in auto sales.
Fire and Crop insurance recorded more moderate growth as insurers focused on pricing discipline in commercial renewals and calibrated crop discounting to meet Expense of Management (EOM) guidelines.
Fire and Crop were the most profitable segments, recording ROEs of 17% and 13%, respectively. Within Motor, Third Party insurance generated an industry-wide ROE of 22%, compared with -34% for Own Damage, highlighting opportunities to improve portfolio mix and claims management.
Private insurers outperform public sector peers
Private insurers remained relatively resilient on underwriting metrics, with their combined ratio broadly stable at 109%, an improvement of 0.4 percentage points. Their ROE remained close to 9%, although it declined by 56 basis points.
Large private insurers were among the strongest performers, combining 7% premium growth with a 2–3 percentage point improvement in both loss ratio and combined ratio. Their ROE increased to 15% from 14%, indicating that scale and underwriting discipline can coexist, BCG said.
Public sector insurers, meanwhile, saw their combined ratio deteriorate to 128%, while ROE declined to -4% from 2%. BCG attributed the performance to ongoing recalibration as public sector insurers address legacy pricing and claims-related challenges. Continued underwriting reforms could help narrow the performance gap, it said.
The industry’s overall capital and reinsurance position remained sound. Against the Insurance Regulatory and Development Authority of India’s (IRDAI) required solvency ratio of 1.5x, most private insurers remained comfortably capitalised.
However, public sector insurers other than New India Assurance had relatively lower solvency headroom, keeping capital adequacy an area of continued focus.
General insurers ceded slightly more than 31% of GDPI to reinsurers. Cessions were particularly high in Fire and Crop insurance, at 82% and 56%, respectively, reflecting the higher exposure of these segments to catastrophic and weather-related risks.
BCG said the overall trends indicate that the industry is increasingly shifting from volume-led growth towards sustainable pricing, portfolio optimisation and underwriting discipline.
“The Indian general insurance industry continues to grow, and it is entering a more mature phase,” said Pallavi Malani, Managing Director & Partner at Boston Consulting Group and India Lead – Insurance. “The real story in FY27 is which insurers are successfully converting scale into disciplined, profitable underwriting.”