The report noted that reforms by insurance regulators, along with broader government policy changes, are bringing greater transparency and reshaping the industry structure for a new phase of accelerated growth.
During the year, the government exempted Goods and Services Tax (GST) on individual life and health insurance, and also raised the foreign direct investment (FDI) cap in the sector from 74 per cent to 100 per cent. These changes can bring in new capital, widen access to insurance and spur demand.
According to Swiss Re, the annual growth rate of life insurance is expected to average 6.8 per cent over the next five years due to widening distribution networks, rising demand for retirement products and credit growth.
Alongside macroeconomic tailwinds, reforms are expected to lift insurance penetration from 3.5 per cent in 2025 to above 4 per cent by 2036, the report said.
The non-life
insurance market faces near-term challenges due to regulatory shifts and medical inflation, but growth is expected to recover in the medium term. Health insurance is projected to grow at an average rate of 7.2 per cent a year over 2026–30, while motor insurance, driven by increased vehicle uptake, is expected to expand by 7.5 per cent annually over the same period, the report said.
Swiss Re also highlighted that rising natural catastrophe risk is colliding with rapidly expanding asset exposure in India, with an estimated $26–29 trillion in assets at the national level. Some of this exposure lies in catastrophe hotspots where high asset concentration overlaps with multiple perils, meaning a natural disaster in these regions could significantly impair national economic growth.
Amitabha Ray, Swiss Re’s market head for India, said: “India is a true bright spot for insurance growth in the mid term as opportunities emerge, especially in health and motor insurance. We are set to benefit from forward-looking regulatory reform, digital innovation and a disciplined but attractive product mix for consumers.”
 "Swiss Re")