New Delhi [India], June 2 : The Indian general insurance industry is expected to witness strong growth in the coming years, according to a recent report by Investment Information and Credit Rating Agency (ICRA).
ICRA projects the industry's gross direct premium income (GDPI) to grow by 8.7 per cent in FY2026 and 10.9 per cent in FY2027. This growth is attributed to the improvement in economic activity and increased pricing discipline.
Similarly, the agency forecasts the general insurance industry's GDPI to increase from an estimated Rs. 2.97 trillion in FY2025 to between Rs. 3.21-3.24 trillion in FY2026, and further to Rs. 3.53-3.61 trillion in FY2027.
"GDPI growth is expected to improve in FY2026 supported by pricing discipline in commercial lines and low base, continued growth in health and increase in vehicle sales vis-a-vis FY2025, partly offset by the impact of 1/n,1 which is expected to continue in H1 FY2026," said Neha Parikh, Vice President and Sector Head - Financial Sector Ratings, ICRA.
Adding to the forecast, ICRA suggests that private insurers are likely to experience stronger growth, while public sector insurers' growth is expected to be moderate due to their weak capital position.
The underwriting performance of private insurers is expected to get better, driven by better pricing discipline.
According to Investopedia, Underwriting is the process through which an individual or institution takes on financial risk for a fee.
ICRA estimates a substantial capital requirement of Rs. 152-170 billion for three PSU general insurers (excluding New India Assurance) to achieve a solvency ratio of 1.5 times by March 2026, assuming full forbearance on the Fair Value Change Account (FVCA), given their weak profitability.
Furthermore, ICRA projects the return on equity (RoE) for private insurers to improve to 12.6% in FY2026 and 12.8% in FY2027.
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