Non-life insurance premiums in India grew 10 per cent year-on-year to ₹27,455 crore in August, driven by strong performance in health insurance and crop insurance segments. According to CareEdge Ratings, the growth was supported by a timing shift in crop enrollment and improved performance across retail lines. April-August FY27 growth rose to 9.6 per cent from 6 per cent a year earlier as the drag from fire and crop insurance shrank significantly. The momentum is supported by broader economic indicators, with GST collections rising 8.4 per cent month-on-month from ₹1.95 lakh crore in June to ₹2.11 lakh crore in July 2026, driven primarily by import GST growth of 28.8 per cent. The global healthcare insurance market is also experiencing significant expansion, with market size projected to grow from USD 3.27 trillion in 2026 to USD 4.82 trillion by 2033, registering a compound annual growth rate of 5.7% during the forecast period.
Health insurance emerged as the principal growth driver, accounting for 39.5 per cent of August premium and 44 per cent of premium for April-August FY27. Health premiums grew 18 per cent year-on-year in August to ₹10,834 crore, compared with 26 per cent in July and 20.9 per cent year-to-date. As reported by CareEdge Ratings, the quality of growth has improved with rising renewal rates, falling claims ratio and volumes coming from customers new to insurance. Private insurers and standalone health insurers wrote 73.3 per cent of August premium, the highest share this year, indicating strong market penetration. The growth aligns with broader economic trends showing combined credit to industry and services rising 2.4 per cent monthly and 20.5 per cent year-on-year in June 2026. Public health insurance is projected to hold the market share of 68.4% in 2026, aided by extensive government-funded schemes and an increased emphasis on economical and equitable healthcare.
The removal of goods and services tax (GST) on individual health and life insurance has significantly boosted demand and expanded the customer base for insurers. According to reports from Business Standard, the GST Council exempted individual life and health insurance policies — including family floater and senior citizen policies, as well as their reinsurance — from GST effective September 22, 2025. This move aimed to make insurance more affordable and increase coverage levels across the industry. The policy change has contributed to GST revenue growth of 13.9 per cent year-on-year in June, with import GST rising 34.6 per cent against 6.5 per cent for domestic collections, indicating stronger demand for imported inputs that could pressure production costs and working capital. The global healthcare insurance market is highly competitive, with competition centered on coverage breadth, premium affordability, claims efficiency, digital accessibility, and provider-network strength, with market participants increasingly investing in digital platforms, AI-driven underwriting and claims management, and personalized insurance products.
The industry has witnessed significant improvements in coverage levels and policy values following the tax exemption. According to Business Standard, there has been a 10-15 per cent increase in the average ticket size of life and health insurance policies, indicating that customers are opting for higher levels of coverage. Life insurers reported stronger demand for term insurance policies with sums insured of more than ₹2 crore, while health insurers saw greater demand for high-value policies with sums insured ranging from ₹20 lakh to over ₹1 crore. The share of term insurance in the overall product mix also increased during the period. However, the broader economic context shows wholesale inflation still exceeds consumer inflation by more than five points, with firms facing input prices rising faster than output prices, particularly impacting Micro, Small and Medium Enterprises with limited pricing power. The global healthcare insurance market is expected to shift from traditional reimbursement-focused models toward digitally enabled, preventive, and personalized coverage models, with insurers increasingly combining AI, digital health platforms, telemedicine, and data-driven underwriting to improve affordability and claims efficiency.
The GST reduction has particularly benefited new customer acquisition and market penetration. As reported by Business Standard, Parthanil Ghosh, MD & CEO of HDFC ERGO General Insurance, stated that "the GST reduction had a significant positive impact on health insurance, particularly on retail health. At HDFC ERGO, our new health insurance business has almost doubled on a year-on-year basis during this period." The company noted that both existing customers are moving towards higher covers and a new set of people are entering the health insurance market due to improved affordability. The momentum is supported by industrial output rising with IIP climbing from 118.2 in April to 122.7 in May 2026, though core-sector growth slowed to 0.5 per cent from 1.8 per cent in April. However, reported retail health growth is likely to moderate from the second half of September as the GST-related base becomes comparable. The intermediaries segment is projected to hold a market share of 47.3% in 2026, due to their ability to guide consumers with tailored advice and broaden insurers' reach through existing customer and business networks.
Despite the positive demand impact, the removal of GST has created operational challenges for insurers. According to Business Standard, the withdrawal of input tax credit (ITC) has increased operating costs and put pressure on margins. Ghosh noted that "the industry's base has expanded, with a fresh set of people buying health insurance. The GST-related costs that insurers could not offset have already been absorbed into their P&L, which has had a negative impact." The bigger structural challenge remains healthcare inflation, which the GST reduction does not address. The impact has also been felt by insurance distributors, with lower commissions following the GST change, though higher volumes have helped offset the pressure. The global healthcare insurance market faces challenges from high insurance premiums limiting affordability for some consumers and complex policy terms and claim procedures reducing accessibility, though digitalization and AI adoption are helping streamline processes and improve customer experience.
