India’s general insurance sector eyes modest FY27 growth as retail health demand offsets intense competition in motor insurance segments, according to a recent report by Emkay covering the second quarter of the financial year.
Industry Outlook for FY27
India’s general insurance (GI) industry is expected to witness modest growth in FY27 amid intense competition and pricing pressures in the motor insurance segment, even as strong demand for retail health insurance and easing pricing aggression in the fire segment are likely to support growth, according to a report by Emkay.
As per Emkay, India’s general insurance industry recorded approximately 7 per cent year-on-year growth in Gross Direct Premium Income (GDPI) during the second quarter of financial year 2026-27 (Q2 FY27), on the back of strong performance in the motor and health insurance segments. “Going forward, we expect the industry to report modest growth in FY27,” it said.
Segment-Wise Performance Analysis
The retail health insurance segment registered around 32 per cent year-on-year growth, driven by sustained demand, improved affordability and benefits from Goods and Services Tax (GST) changes. In the motor insurance category, the Own Damage (OD) segment grew approximately 16 per cent year-on-year, supported by healthy new vehicle sales. “The Motor OD segment delivered ~16% yoy GDPI growth in 1HFY27, led by healthy growth in new vehicle sales, supported by a reduction in GST rates,” it said.
Growth Drivers and Market Players
Notably, growth was majorly driven by private multiline players “clocking ~17% yoy growth, while PSU players posted ~14% yoy growth.” On the other hand, Motor Third-Party (TP) insurance segment recorded around 10 per cent growth. Group health insurance premiums also increased by approximately 14 per cent during the quarter.
However, it noted, “While the Motor and Health segments delivered healthy growth, the industry saw ~7% GDPI growth, offset by a decline in the Crop and Fire segments.”
Performance in H1 FY27
As per Emkay, the retail health insurance segment remained the fastest-growing category, recording approximately 31 per cent year-on-year growth in the first half of financial year 2026-27 (H1 FY27), driven by improved affordability following the Goods and Services Tax (GST) rate cut. Similarly, the private multiline general insurers outperformed Standalone Health Insurers (SAHIs), registering around 40 per cent year-on-year growth compared with 36 per cent for SAHIs. Meanwhile, public sector undertaking (PSU) insurers recorded a modest growth of approximately 6 per cent during the period.
Additionally, “The Commercial Lines segment’s GDPI declined ~5% yoy in 1HFY27, driven by ~21% decline in the Fire and Engineering segment.”
Strategic Outlook and Regulatory Impact
Overall, the industry is going to post modest growth “owing to i) continued pricing aggression and heightened competitive intensity in the Motor OD segment; ii) healthy growth momentum in the retail health segment, led by better affordability; and iii) easing of pricing aggression in the Fire segment from 2H onward.”
Against such a backdrop, Emkay expects large private general insurers to focus on profitability. “Further, the proposed distribution reforms are likely to drive better discipline in the GI market; however, we remain watchful of the final paper to be published by the regulator,” it said. (ANI)
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