India’s general insurance sector experienced a slowdown in July 2025, with total premiums rising by only 2.8% year-on-year. Weakness in the motor insurance segment weighed heavily on the overall numbers, even as standalone health insurers delivered robust double-digit growth.
| Segment | Premium Growth | July 2025 Premium (₹ Cr) |
|---|---|---|
| General Insurance (Total) | +2.8% | 29,729 |
| Multi-line General Insurers | -0.3% | 24,480 |
| Standalone Health Insurers | +10.4% | 3,622 |
According to the latest data from the General Insurance Council, the sector’s growth in July was far from impressive. The motor insurance portfolio — historically a major revenue driver for general insurers — saw a pronounced underperformance. Factors contributing to the slump include sluggish new vehicle sales, muted corporate fleet renewals, and sustained pressure on pricing.
Among the major players, New India Assurance was a notable outlier, posting a 16% rise in premiums, while others like ICICI Lombard, HDFC Ergo, and Bajaj Allianz recorded declines. Analysts also note the impact of the 1/n accounting rule for multi-year policies, which spreads premium recognition over the policy term, making monthly growth appear weaker.
In contrast, health insurance emerged as the bright spot. Standalone health insurers (SAHIs) clocked over 10% premium growth, buoyed by rising healthcare costs, increasing awareness of medical coverage needs, and growing penetration in Tier 2 and Tier 3 cities. Retail health policies have led this expansion, while corporate group health covers have shown slower momentum.
The rise in medical inflation is prompting more individuals and families to opt for higher sum-insured options and add-on covers like critical illness and OPD care. This trend is expected to sustain the momentum in the health insurance space through the second half of the financial year.
Why It Matters:
- Shifting Growth Drivers: With motor insurance slowing, the general insurance industry must lean more on health, property, and specialty lines to maintain growth.
Choosing the right purchase channel can also make a difference — Is It Better to Buy Insurance Online or Through an Agent? offers a detailed comparison. - Consumer Impact: Weak motor performance could push insurers to adjust premiums or distribution strategies, especially in urban motor markets.
- Regulatory Angle: Health sector performance is drawing closer IRDAI scrutiny on pricing and hospital network practices to ensure affordability and claim transparency.
As motor insurance struggles and health insurance surges ahead, India’s general insurance market is clearly at a turning point — one that will test insurers’ adaptability in the months ahead.
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