AM Best has maintained its outlook on India’s non-life insurance segment at stable, citing supportive macroeconomics, as well as insurance demand buttressed by regulatory initiatives and reforms.

India’s non-life segment recorded mid-single-digit premium growth for the fiscal year ending 31 March 2025 (FY2025), according to the Best’s Market Segment Report, “Market Segment Outlook: India Non-Life Insurance.” Growth moderated relative to the prior year given the pricing pressure in the fire segment and slower business expansion in motor insurance. FY2025 also saw changes in accounting for long-term policies, further dampening reported growth. Despite these challenges, momentum is expected to improve over the near term as insurance demand strengthens and regulatory financial inclusion initiatives gain traction.

“India’s long-term economic outlook remains favourable for non-life insurance growth despite the near-term moderation,” said Chris Lim, associate director, analytics, AM Best. “Recent reform to the goods and services tax directly supports insurance demand by reducing the rate on individual life and health insurance policies to 0% from 18%. Improved affordability, particularly for health insurance policies, is expected to bolster individual health insurance demand meaningfully.”

A key provision in the recently passed Sabka Bima Sabki Raksha Bill (Amendment of Insurance Laws), 2025, raises the foreign direct investment limit in insurance companies to 100% from 74%. This is expected to attract additional capital, enhance financial flexibility and bolster the segment’s solvency.

“While increased foreign participation may initially intensify competition, it is also likely to accelerate innovation, efficiency and market maturity over time”, said Victoria Ohorodnyk, director, analytics, AM Best.

The report also notes that investment yields for Indian non-life insurers are expected to remain broadly steady. Consistent interest rates, together with the resilience of domestic equity markets, are expected to support investment returns over the medium term, although elevated equity exposure heightens sensitivity to market volatility.

To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=361632.

Rob Curtis, managing director and chief executive officer of AM Best’s Singapore operations, will be attending the 19th annual India Rendezvous, which is taking place 19-21 January 2026, at the JW Marriott Mumbai Juhu, in Mumbai, India. To arrange a meeting with Curtis at the conference to learn more about AM Best, its role in the insurance industry and the resources it offers to insurance professionals, including Best’s Credit Ratings and Best’s Performance Assessments for Delegated Underwriting Authority Enterprises, please email rob.curtis@ambest.com.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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