Indian Insurance Companies See Strong Profit Growth: Moody’s Report

India’s rapidly expanding economy is creating favourable conditions for the domestic insurance sector, according to international rating agency Moody’s. The agency has projected that India’s economic growth rate could reach 7.3 percent in the current financial year. Supported by strong economic momentum, rising average incomes are expected to drive higher demand for insurance policies, the report noted.

Reflecting these positive trends, total insurance premium income during the April–November period of the current financial year rose by 17 percent to ₹10.9 trillion, Moody’s said. Health insurance premiums grew by 14 percent, while new business premiums in the life insurance segment recorded a robust 20 percent increase. For FY 2024–25, overall premium collections are estimated to have grown by 7 percent to ₹11.9 trillion.

Moody’s attributed the accelerating growth in the insurance sector to increased consumer awareness and rapid digitalisation across the economy. The agency also highlighted several government initiatives aimed at improving the profitability of public sector insurers, including stake sales in LIC, capital support linked to enhanced underwriting capacity, and proposals for the merger or privatisation of certain entities. Additionally, raising the foreign direct investment (FDI) limit in insurance companies from 74 percent to 100 percent is expected to provide greater financial flexibility and support long-term growth in the sector, Moody’s said.