Health, motor demand to drive India general insurance to ₹5.4 lakh crore by 2030

India’s general insurance industry is on track for steady expansion over the rest of the decade, with gross written premium (GWP) expected to cross ₹5.4 lakh crore by 2030, according to a report by GlobalData.

Backed by a growing economy and deeper insurance penetration, the industry is projected to grow at a 10% CAGR from ₹3.6 lakh crore in 2026. Growth will be anchored by strong demand for health and motor insurance, while policy reforms such as tax exemptions, GST reliefs, and the opening up of 100% FDI will create a more enabling environment, the report noted.

GlobalData’s insurance database estimates that the industry will register 8.5% growth in general insurance premiums in 2025. The growth is expected to moderate to 5.1% in 2026 before accelerating again from 2027 onward.

“The moderation in 2026 reflects a normalisation following the post-GST surge and the impact of accounting changes. Motor and health together accounted for 72.6% of general insurance premiums in 2025, underscoring its role as the sector’s growth engine,” the report highlighted.

Motor, health segments anchor growth

As per the report, motor and health insurance continue to dominate the sector, accounting for 72.6% of total premiums in 2025. Personal Accident and Health (PA&H) remains the largest segment, contributing 40.9% of premiums, up from 35.7% in 2021, and is expected to grow 8.8% in 2026.

The expansion in health insurance has been supported by affordability measures, including the removal of GST on retail health policies from September 2025, which boosted policy uptake. At the same time, insurers are rolling out products with OPD and wellness coverage, aiming to reduce out-of-pocket expenses for consumers.

“The removal of GST on retail health insurance from September 2025 made protection more affordable, boosting policy uptake; Q4 2025 data showed standalone health insurance premiums up by 13.2% quarter-on-quarter,” said Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData.

Motor insurance, the second-largest segment with a 31.7% share, is also evolving. Growth in electric vehicle (EV) insurance is picking up pace, driven by higher vehicle values and advanced components. Usage-based insurance products and telematics-led underwriting are gaining traction, reflecting a shift toward more customised offerings, the report noted.

Digital push and regulatory reforms to boost growth

According to Sahoo, the industry’s growth between 2021 and 2025 was supported by digitalisation in sales and claims processing, GST-related benefits, and strong demand in motor and health segments.

“Growth during 2026-30 is expected to be driven by stonger policyholder protection, faster claims settlement, and broader catastrophe-risk coverage. Reforms to strengthen insurance’s role as “invisible infrastructure,” with a focus on inclusion and climate resilience, are expected to bolster market penetration in tier II and tier III cities and among micro, small, and medium enterprises.”

Looking ahead, the next phase of growth will be driven by stronger policyholder protection, faster claims settlement, and wider coverage for catastrophe risks. Regulatory reforms such as 100% FDI, enhanced powers for the Insurance Regulatory and Development Authority of India (IRDAI), and composite licensing are expected to attract capital, improve product innovation, and deepen market penetration, the report noted.

Rising focus on climate risk and disaster coverage

However, service quality issues and rising customer complaints remain key concerns, while external risks such as geopolitical tensions and climate-related losses could weigh on profitability.

According to Sahoo, digital brokers are enhancing post-accident support by assigning dedicated claims managers, coordinating with garages and surveyors, and escalating disputes to expedite fair settlements. “Such channels are also emphasising digital documentation to cut paperwork and reduce claim delays.”

At the same time, car insurance premiums face upward pressure as reinsurers reprice catastrophe exposure and repair-cost inflation rises. The strong 2025 auto sales backdrop supports sustained demand for motor coverage, he said.

A key emerging trend is the growing focus on climate risk protection. Several states have stared institutionalising risk transfer by approving a comprehensive disaster home insurance program that blends parametric (fast, trigger-based payouts) with cover up to ₹10 lakh for families living below the poverty line to close protection gaps for climate-exposed households and reduce ad-hoc fiscal relief.

At the same time, reinsurers are repricing catastrophe exposure, which, along with rising repair costs, is pushing up motor insurance premiums. Geopolitical tensions, particularly in West Asia, are also adding pressure on marine, aviation, and transit (MAT) insurance, as well as construction costs, he added.

As per the report, property insurance is set to benefit from rising public investment in infrastructure. The segment accounted for 20.2% of premiums in 2025, and growth is expected to accelerate with infrastructure spending projected to reach $128.6 billion during 2026–27. Increased development across tier II and tier III cities - spanning housing, transport, and urban infrastructure - will further support demand for property insurance over the medium term.