India non-life insurers face impact from 1/n rule transition: CareEdge

Despite decline, experts predict premiums for to exceed Rs3 lakh.

India’s non-life insurance industry in India reported a premium of Rs 21,747.6 crore in February 2025, marking a 2.8% decline compared to the 12.6% growth recorded in February 2024. 

“The industry’s transition to the 1/n rule, subdued PV growth, and weakness across the board in the commercial lines have dented the industry’s performance. Meanwhile, the decline for general insurers was only partially offset by the SAHIs,” according to Saurabh Bhalerao, Associate Director of CareEdge Ratings, in a research note.

Despite the decline, industry experts predict that premiums for fiscal year 2025 are likely to exceed Rs 3 lakh crore, driven by a favourable regulatory environment and the Bima Trinity initiative. 

The health insurance sector is expected to maintain robust growth, with SAHIs continuing to dominate the retail insurance space. 

Growth in the motor insurance segment, however, remains dependent on vehicle sales momentum and changes in third-party (TP) tariffs.  

“CareEdge Ratings anticipates that the Indian non-life insurance market is likely to expand at a rate of approximately 13-15% in the medium term,” Priyesh Ruparelia, Director of CareEdge Ratings, said.

However, heightened competition and geopolitical uncertainties could pose challenges to the sector, said Ruparelia.