India's general insurance industry poised for digital acceleration and global integration in 2026
As we enter 2026, the expectations are clear: this year will be about acceleration. Growth is projected at 8–13%, driven by digital distribution, deeper penetration into underserved segments and continued regulatory momentum.
- Jan 8, 2026,
- Updated Jan 8, 2026 12:25 PM IST
As we close the chapter on 2025 and look ahead to 2026, India’s general insurance industry stands at the cusp of a transformative leap. The year just gone was not merely about incremental growth it was about the industry evolving in capability, resilience, and strategic purpose. With gross direct premiums reaching ₹3.08 trillion in FY2025 a 6.2% year-on-year rise the sector reinforced its underlying strength even as the protection gap remained wide, with insurance penetration hovering around 1% of GDP, far below the global norm of 4%. This underlines both the progress made and the opportunity that still lies ahead.
Health insurance continued to command a dominant share more than one-third of total premiums driven by heightened risk awareness, relentless product innovation and the persistent pressure of ~12% medical inflation. The behavioural shift in customer attitudes was striking protection has moved from discretionary spending to a foundational financial priority.
2025 will be remembered for seismic regulatory progress. IRDAI’s reform agenda advanced with urgency, signaling a move toward a unified, customer-centric and digitally interoperable insurance ecosystem. Key pillars of this transformation including Bima Trinity, Bima Sugam, Bima Vistaar and Bima Vahak are progressively being woven into the industry’s fabric.
Bima Sugam envisioned as a unified digital platform for policy purchase, servicing and claims holds the promise of a breakthrough akin to UPI in payments, by simplifying access, enhancing transparency and radically improving customer trust and experience.
Another watershed was the GST rationalisation on select insurance products particularly the removal of GST from certain health covers. While operational adjustments were necessary, in the long run this enhances affordability and further positions insurance as a necessity rather than a luxury.
A major development that will shape the future trajectory of the industry is the liberalisation of Foreign Direct Investment (FDI) norms. In 2025, the government moved decisively to raise the FDI cap in insurance from 74% to 100%, a shift designed to attract deeper global capital, advanced technology and best-in-class governance practices into India’s insurance market. This step also eliminates the need for foreign insurers to find Indian JV partners to operate here, thereby easing entry and accelerating expansion provided the premium is invested in India.
As Parliament passed the Insurance Laws (Amendment) Bill enabling full FDI, expectations are high that global players with robust balance sheets and global product expertise will enter more aggressively, bringing not just capital but innovation that can help bridge India’s protection gap.
The digital transformation that underpins modern insurance has, paradoxically, also exposed the industry to elevated cyber and fraud risks. With digital adoption up over 30%, convenience has brought complexity: fraud losses are estimated at ₹50,000 crore nearly 10% of premiums while cyber incidents climbed into the millions, exposing tens of millions of records and escalating threats like phishing and deepfake-enabled fraud. Thus, fraud prevention and cybersecurity are now strategic imperatives, with AI-driven detection and predictive analytics becoming core investments rather than optional capabilities.
Climate risk too has shifted from episodic disruption to structural challenge. India experienced over 240 extreme weather events in 2024, and that volatility continued in 2025 with floods, heatwaves and cyclones underscoring the need for parametric insurance, real-time modelling and rapid-payout products that help communities and businesses recover faster.
2025 also saw distribution evolve meaningfully. Embedded insurance protection sold at the point of need across travel, mobility, fintech, e-commerce and digital health platforms gained traction, reflecting a generational shift in customer buying behaviour. Tier-2 and Tier-3 markets emerged as growth engines, supported by vernacular digital interfaces and community-centric outreach through Bima Vahak field networks.
The industry’s collective pledge to invest ₹100 crore annually over the next 3–5 years to build nationwide insurance awareness embodies a shared commitment to financial resilience and informed protection.
As we enter 2026, the expectations are clear: this year will be about acceleration. Growth is projected at 8–13%, driven by digital distribution, deeper penetration into underserved segments and continued regulatory momentum. The rollout of Bima Sugam is expected to redefine customer experience, compress distribution costs and enable transparent product comparisons. Advances in AI-powered underwriting will usher in hyper-personalised covers from telematics-inspired motor pricing to wellness-linked health incentives and modular risk solutions tailored for SMEs.
If 2025 established the groundwork, then 2026 is poised to be the year the Indian general insurance sector truly steps into its next era one defined by digital empowerment, inclusive protection and robust global integration, bringing us closer to the vision of “Insurance for All by 2047.”
(Views are personal; the author is CEO, IndusInd General Insurance Company Limited)
As we close the chapter on 2025 and look ahead to 2026, India’s general insurance industry stands at the cusp of a transformative leap. The year just gone was not merely about incremental growth it was about the industry evolving in capability, resilience, and strategic purpose. With gross direct premiums reaching ₹3.08 trillion in FY2025 a 6.2% year-on-year rise the sector reinforced its underlying strength even as the protection gap remained wide, with insurance penetration hovering around 1% of GDP, far below the global norm of 4%. This underlines both the progress made and the opportunity that still lies ahead.
Health insurance continued to command a dominant share more than one-third of total premiums driven by heightened risk awareness, relentless product innovation and the persistent pressure of ~12% medical inflation. The behavioural shift in customer attitudes was striking protection has moved from discretionary spending to a foundational financial priority.
2025 will be remembered for seismic regulatory progress. IRDAI’s reform agenda advanced with urgency, signaling a move toward a unified, customer-centric and digitally interoperable insurance ecosystem. Key pillars of this transformation including Bima Trinity, Bima Sugam, Bima Vistaar and Bima Vahak are progressively being woven into the industry’s fabric.
Bima Sugam envisioned as a unified digital platform for policy purchase, servicing and claims holds the promise of a breakthrough akin to UPI in payments, by simplifying access, enhancing transparency and radically improving customer trust and experience.
Another watershed was the GST rationalisation on select insurance products particularly the removal of GST from certain health covers. While operational adjustments were necessary, in the long run this enhances affordability and further positions insurance as a necessity rather than a luxury.
A major development that will shape the future trajectory of the industry is the liberalisation of Foreign Direct Investment (FDI) norms. In 2025, the government moved decisively to raise the FDI cap in insurance from 74% to 100%, a shift designed to attract deeper global capital, advanced technology and best-in-class governance practices into India’s insurance market. This step also eliminates the need for foreign insurers to find Indian JV partners to operate here, thereby easing entry and accelerating expansion provided the premium is invested in India.
As Parliament passed the Insurance Laws (Amendment) Bill enabling full FDI, expectations are high that global players with robust balance sheets and global product expertise will enter more aggressively, bringing not just capital but innovation that can help bridge India’s protection gap.
The digital transformation that underpins modern insurance has, paradoxically, also exposed the industry to elevated cyber and fraud risks. With digital adoption up over 30%, convenience has brought complexity: fraud losses are estimated at ₹50,000 crore nearly 10% of premiums while cyber incidents climbed into the millions, exposing tens of millions of records and escalating threats like phishing and deepfake-enabled fraud. Thus, fraud prevention and cybersecurity are now strategic imperatives, with AI-driven detection and predictive analytics becoming core investments rather than optional capabilities.
Climate risk too has shifted from episodic disruption to structural challenge. India experienced over 240 extreme weather events in 2024, and that volatility continued in 2025 with floods, heatwaves and cyclones underscoring the need for parametric insurance, real-time modelling and rapid-payout products that help communities and businesses recover faster.
2025 also saw distribution evolve meaningfully. Embedded insurance protection sold at the point of need across travel, mobility, fintech, e-commerce and digital health platforms gained traction, reflecting a generational shift in customer buying behaviour. Tier-2 and Tier-3 markets emerged as growth engines, supported by vernacular digital interfaces and community-centric outreach through Bima Vahak field networks.
The industry’s collective pledge to invest ₹100 crore annually over the next 3–5 years to build nationwide insurance awareness embodies a shared commitment to financial resilience and informed protection.
As we enter 2026, the expectations are clear: this year will be about acceleration. Growth is projected at 8–13%, driven by digital distribution, deeper penetration into underserved segments and continued regulatory momentum. The rollout of Bima Sugam is expected to redefine customer experience, compress distribution costs and enable transparent product comparisons. Advances in AI-powered underwriting will usher in hyper-personalised covers from telematics-inspired motor pricing to wellness-linked health incentives and modular risk solutions tailored for SMEs.
If 2025 established the groundwork, then 2026 is poised to be the year the Indian general insurance sector truly steps into its next era one defined by digital empowerment, inclusive protection and robust global integration, bringing us closer to the vision of “Insurance for All by 2047.”
(Views are personal; the author is CEO, IndusInd General Insurance Company Limited)