India’s general insurance industry grows 9% in FY26 to ₹3.36 lakh crore: BCG report
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India’s general insurance industry recorded 9% year-on-year growth in Gross Direct Premium Income (GDPI) to ₹3.36 lakh crore in FY26, according to a report by Boston Consulting Group (BCG).
Gross Written Premium (GWP) rose 10% to ₹3.44 lakh crore during the year, with private insurers, including standalone health insurers (SAHIs), continuing to drive market expansion. Private insurers’ GDPI grew 10%, compared with 8% growth among public sector insurers.
The industry’s underwriting metrics, however, reflected a period of recalibration following several years of strong growth. The combined ratio increased by two percentage points to 113%, while profit after tax (PAT) fell 23% year-on-year to ₹10,000 crore. Return on equity (ROE) declined to 6% from 9% a year earlier.
“India’s 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.”
Health, motor drive growth
Health insurance emerged as the fastest-growing segment, with growth accelerating to 17% for the full year after registering 10% growth in the first half. The acceleration followed GST rationalisation.
Motor insurance grew close to 9%, despite renewal-heavy portfolios limiting the extent to which insurers could pass through 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.
BCG said the trends indicate that the industry is increasingly prioritising sustainable pricing and underwriting discipline over volume-led growth.
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%, declining 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.
Meanwhile, public sector insurers saw their combined ratio deteriorate to 128% while ROE declined to -4% from 2%. According to BCG, the performance reflects ongoing recalibration as public sector insurers address legacy pricing and claims-related challenges. Continued underwriting reforms could help narrow the performance gap, the report said.
Health insurers gain market share
Profitability varied across business lines. Health insurance, despite being the fastest-growing segment, recorded an industry-wide ROE of -7% in FY26 as insurers continued investing in retail health distribution and infrastructure.
Fire and Crop were the most profitable segments, with ROEs of 17% and 13%, respectively.
Within Motor insurance, Third Party business generated an industry-wide ROE of 22%, compared with -34% for Own Damage. The divergence highlights the potential for insurers to improve portfolio mix and claims management, BCG said.
Standalone health insurers also increased their share of industry GDPI by two percentage points, supported by continued momentum in retail health insurance.
Reinsurance and capital remain stable
The industry’s overall capital and reinsurance position remained sound, according to the report. 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, making 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.
The report is based on GDPI data from the General Insurance Council and public disclosures by individual insurers for GWP, combined ratio, loss ratio and ROE, along with BCG analysis. It covers 34 general insurers and standalone health insurers across different market segments.