Page 7 - The Insurance Times May 2025

Ò»©­

insurers are likely to drop by up to 10%
Non-Life Insurance Premium Growth Slows to 6.2% in FY26, supported by higher reinsur-
in FY25 ance capacity and an improved loss

The gross direct premium underwritten by non-life insurers grew by 6.20% experience, industry sources said.
year-on-year (YoY) in FY25 to Rs 3.08 trillion, a notable slowdown compared This marks a reversal from last year
to 12.78% YoY growth in FY24, when premiums stood at Rs 2.89 trillion, when rates increased by around 5%
data showed. The moderation is attributed to a broader economic slow- after adjusting for risk. However, con-
down and changes in accounting norms. cerns persist around new norms for

Premiums of general insurers rose 5.20% YoY to Rs 2.58 trillion, while collateral requirements for cross-bor-
standalone health insurers reported a robust 16% growth to Rs 38,413.57 der reinsurers, which could impact re-
crore. However, specialised insurers saw a marginal decline of 0.75% to Rs newal negotiations.
11,106.54 crore. During the April reinsurance renewals,

For March 2025, total non-life insurance premiums rose 0.5% to Rs Indian insurers transfer a portion of
26,698.94 crore. General insurers' premium collection was down 0.1% to their risk to global reinsurers by pay-
Rs 21,319.28 crore, while standalone health insurers grew 11.10% to Rs ing premiums to mitigate large claim
4,800.13 crore, reflecting stronger demand in health segments. exposures. In January renewals glo-
bally, reinsurers were observed to pre-
fer providing excess of loss coverage.
Terrorism Insurance Pre- non-life insurers in India are part of this According to insurance broker Aon,
pool, providing collective cover for ter- rates were largely flat to slightly down
miums to Drop Up to 15% rorism risks.
by 2.5% on a risk-adjusted basis glo-
from April 1 The latest move to lower premiums bally. Demand for reinsurance capac-
Corporates seeking terrorism risk cover reflects improved market conditions ity has remained broadly stable, sug-
are set to benefit from a reduction in and higher reinsurance capacity for gesting a balanced market environ-
terrorism-related risks. The rate cuts ment for Indian insurers this year.
premiums by up to 15% starting April
are expected to provide significant re-
1, following a decision by state-owned
lief to businesses seeking coverage,
reinsurer General Insurance Corpora- Insurance Regulation
particularly as global geopolitical risks
tion of India (GIC Re) to slash rates for continue to evolve. Must Transition to Risk-
the terrorism risk insurance pool. Based Framework: IMF-
The terrorism pool was established on Reinsurance Renewal
April 1, 2002, after the September 11, Rates Expected to Drop by WB Report
2001, terrorist attacks in the US led to India's insurance sector should acceler-
a withdrawal of reinsurance capacity 10% in FY26 ate its transition toward risk-based sol-
globally. Administered by GIC Re, all Reinsurance renewal rates for Indian vency and supervision frameworks,

The Insurance Times May 2025 7