AM BEST: INDIA’S NON-LIFE INSURANCE SEGMENT OUTLOOK REMAINS STABLE

KUALA LUMPUR, Jan 16 (Bernama) -- Global credit rating agency, AM Best has maintained its outlook on India’s non-life insurance segment at stable, citing supportive macroeconomic conditions and sustained insurance demand driven by regulatory initiatives and reforms.

According to the Best’s Market Segment Report, India’s non-life segment recorded mid-single-digit premium growth for the financial year ended March 31, 2025 (FY2025).

Growth moderated compared with the previous year due to pricing pressure in the fire insurance segment and slower business expansion in motor insurance. Changes in accounting treatment for long-term policies during the year also weighed on reported growth.

Despite these challenges, momentum is expected to improve over the near term as insurance demand strengthens and regulatory financial inclusion initiatives gain traction, according to AM Best in a statement.

AM Best associate director, analytics, Chris Lim said India’s long-term economic outlook remains favourable for non-life insurance growth despite the near-term moderation.

“Recent reform to the goods and services tax directly supports insurance demand by reducing the rate on individual life and health insurance policies to zero per cent from 18 per cent. Improved affordability, particularly for health insurance policies, is expected to bolster individual health insurance demand meaningfully,” said Lim.

A key provision in the recently passed Sabka Bima Sabki Raksha Bill (Amendment of Insurance Laws), 2025, increases the foreign direct investment limit in insurance companies. The move is expected to attract additional capital, enhance financial flexibility and bolster the segment’s solvency.

AM Best noted that investment yields for Indian non-life insurers are expected to remain broadly stable, supported by steady interest rates and resilient domestic equity markets. However, elevated equity exposure could increase sensitivity to market volatility over the medium term.

-- BERNAMA