Whalesbook
Sector Growth Projections
A report by GlobalData forecasts the Indian general insurance sector to grow at a 10% compound annual growth rate (CAGR) from 2026. This expansion will see gross written premiums rise from an estimated ₹3.6 lakh crore in 2026 to ₹5.4 lakh crore by 2030. The sector experienced 8.5% growth in 2025, with a moderation to 5.1% in 2026, attributed to accounting shifts and post-GST normalization. However, growth is expected to accelerate again after 2026, driven by economic expansion and increased insurance penetration.
Health and Motor Insurance Lead
Together, health and motor insurance are key growth engines, accounting for 72.6% of general insurance premiums in 2025. Personal Accident and Health (PA&H) stands out as the largest segment, holding 40.9% of premiums in 2025, up from 35.7% in 2021. This segment is projected to grow by 8.8% in 2026. Regulatory support, including the removal of GST on retail health policies from September 2025, has significantly boosted uptake. Insurers are enhancing offerings with outpatient department (OPD) and wellness coverage to reduce consumer out-of-pocket expenses.
Motor insurance, which holds a 31.7% share, is also evolving. The increasing value of electric vehicles (EVs) and their advanced components are driving growth in EV-specific insurance. Usage-based insurance and telematics-led underwriting are becoming more common, signaling a shift towards personalized coverage.
Policy Reforms Fueling Expansion
Looking ahead, the period between 2026 and 2030 is set for growth driven by enhanced policyholder protection, swifter claims settlement, and broader catastrophe risk coverage. Regulatory reforms are central to this expansion, including 100% FDI, stronger IRDAI powers, and composite licensing. These measures aim to attract capital, foster product innovation, and deepen market penetration, especially in tier II and tier III cities and among MSMEs.
Property Insurance Boost from Infrastructure
The property insurance segment, accounting for 20.2% of premiums in 2025, is expected to benefit from substantial public investment in infrastructure. With infrastructure spending projected to reach $128.6 billion during 2026–27, and increased development across smaller cities, demand for property insurance is set to accelerate.
Key Risks and Challenges Ahead
Despite the optimistic outlook, challenges persist. Service quality issues and rising customer complaints remain significant concerns. External factors like geopolitical tensions and climate-related losses pose potential threats to profitability. Reinsurers repricing catastrophe exposure and rising repair costs are already putting upward pressure on motor insurance premiums. Geopolitical instability, particularly in West Asia, is also impacting marine, aviation, and transit (MAT) insurance.