India's non-life insurance sector witnessed a sharp recovery in June 2026, with overall gross written premium (GWP) excluding crop insurance rising 18% year-on-year, marking a significant improvement over previous two months' trends. According to a Kotak Institutional Equities report, the industry growth for the first quarter of FY27 stood at 12% year-on-year. Health insurance continued as the biggest growth driver, with retail health premiums surging 33% year-on-year and overall health premiums growing 23%, while motor insurance gained pace with 14% growth supported by higher own-damage and third-party premium collections amid healthy passenger vehicle and two-wheeler sales.
The Insurance Regulatory and Development Authority of India (Irdai) has proposed allowing insurers to invest up to 5% of shareholders' funds available over and above the required solvency margin in eligible private limited companies with a minimum net worth of ₹25 crore and a track record of profitability. According to reports from The Economic Times, the regulator had sought industry comments by July 10 on these draft norms issued last month. The proposed framework would enable insurers to invest in unlisted companies while remaining within overall prudential limits, providing greater flexibility in managing investment portfolios.
Based on current balance sheets, the proposed framework could expand the sector's investment capacity in private companies to nearly ₹10,000 crore from less than ₹1,500 crore under existing rules, according to industry estimates reported by The Economic Times. This represents a substantial increase in the amount available for investment in privately held businesses across various sectors. The change would enable insurers, which manage long-term liabilities, to play a bigger role in financing private businesses across infrastructure, manufacturing, financial services and other long-duration sectors that require patient capital.
Private insurers and standalone health insurers (SAHIs) continued to outperform state-owned peers, gaining market share on the back of strong retail health demand. As reported by Kotak Institutional Equities, SAHIs reported robust 30% year-on-year growth, significantly outpacing general insurers, while private players reported about 15% year-on-year growth versus 13% year-on-year for public sector undertakings (PSUs). SAHI market share, excluding crop insurance, increased by around 140 basis points year-on-year to 15.9% in June, with private insurers and standalone health insurers continuing to outperform state-owned peers.
The investment framework comes as insurers face mounting climate-related challenges, with extreme weather events driving surging claims and some regions approaching uninsurability. According to the Financial Stability Board, climate risks are threatening global financial stability through both transition risks and physical risks, with the European Central Bank estimating that drought-related risks alone could shrink Eurozone GDP by 15%, putting over €1.3 trillion in loans at risk. Without urgent action, climate-related financial losses could reach up to $25 trillion in global supply chain losses by 2060, highlighting the urgent need for insurers to diversify their investment portfolios into climate-resilient sectors.
