New Delhi, Dec 16 The Indian insurance market experienced soft conditions in 2025 with ample capacity and digital distribution keeping pricing benign across most lines, except cyber and property sectors, a report said on Tuesday.
Market capacity in India is increasing, supported by new entrants, ongoing mergers and acquisitions, and a growing presence of foreign reinsurers, the report from Aon said.
While cyber insurance is facing rising claims costs, it also presents a significant growth opportunity, the report said, adding that property insurance adapts to changes in insurer pricing methodologies, and quasi-tariff rates make it difficult to secure changes to policy wordings.
Foreign direct investment inflows will rise with permission of FDI up to 100 per cent, fueling competition and innovation across the industry, it is forecasted.
"The Indian insurance market presents a dynamic and fast-growing environment with strong government backing, technological innovation, and increasing investor interest, increasing choice for buyers," Aon's Chief Broking Officer, Commercial Risk, Health and Wealth Solutions, India, Shantanoo Saxena, said.
Although global geopolitical tensions and trade disruptions pose risks, India’s market fundamentals and digital transformation in insurance distribution are helping to mitigate uncertainty, he added.
Aon highlighted that pricing is generally flat‑to‑decreasing across most lines, with property being the main exception after changes to India’s rating system.
Capacity is ample across the market, reflecting India’s relatively low take-up rates, while prudent underwriting continues, especially in cyber, where each insurer has its own underwriting criteria and requirements.
Deductible levels are typically flat but increasing for cyber due to rising claims trends, the report noted.
Favourable claims experience in automobile insurance led to buyer-friendly pricing, with buyers exploring optional automobile damage coverage in addition to compulsory third-party liability policies.
Driven by favourable claims experience, casualty sector capacity is sufficient, resulting in attractive pricing and broader coverage, the firm said.
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