Non-life insurance sector continues to witness slowdown in August: Care Edge Ratings

NEW DELHI: The non-life insurance sector in India continued to experience a slowdown in premium growth in August due to a decline in crop insurance and a softer market for passenger vehicles, Care Edge Ratings said in a report.

According to the report, as of August 2025, the non-life insurance sector reported total premium collections of Rs 24,953.0 crore, registering a modest 1.6 per cent rise year-on-year. This was significantly lower compared to a 4.2 per cent increase recorded in August 2024. It stated, “The non-life insurance sector continued to experience a slowdown in premium growth”.

The report noted that the slowdown could be attributed to the switch to the 1/n rule, deferrals on account of expected cuts in the Goods and Services Tax (GST), and weaker performance in crop insurance. A subdued passenger vehicle market also weighed on overall growth. The 1/n rule in insurance is a way of spreading premium income over the entire policy period instead of booking the whole amount upfront.

However, steady growth in health, fire, and engineering segments helped partially offset the slowdown. The report also mentioned that the public sector general insurers maintained their faster growth rate for the eleventh consecutive month in August 2025, driven largely by renewals in the fire, engineering, health, and motor third-party segments.

Despite this, the switch to the 1/n rule continued to affect headline growth for the industry. Private non-life insurers, including standalone health insurers (SAHI), retained their dominant position with a 70 per cent market share in August 2024 and August 2025, compared to 68 per cent in August 2023.

On a year-on-year basis, the report shared that the private insurers accounted for 64.8 per cent of the market in August 2025, slightly lower than 66.4 per cent a year ago. In contrast, the share of public sector insurers increased to 35.2 per cent from 33.6 per cent in August 2024.

Health insurance remained the largest segment within the non-life insurance industry, recording a robust 14.3 per cent growth in August. The growth was attributed to improved traction in other segments as well. However, overall momentum in the industry has moderated, impacted by the 1/n rule and affordability challenges arising from higher premiums. Within the health insurance segment, SAHIs continued to outperform. (ANI)