New Delhi, Jan 19 (.) Moody’s Ratings on Monday projected India’s economy to grow by 7.3 percent in the current fiscal year, saying the strong expansion will support average household incomes and boost demand for insurance protection.
In a report on India’s insurance sector, the global ratings agency said the industry is poised to benefit from sustained premium growth driven by robust economic momentum, rising digitisation, tax reforms, and planned restructuring of the state-owned insurance sector.
The higher premium growth is expected to improve the industry’s currently weak profitability.
Moody’s noted that in FY 2024–25, India’s GDP per capita rose 8.2 percent year-on-year to USD 11,176, while headline GDP growth stood at 6.5 percent.
The agency said strong economic growth helped drive a 17 per cent increase in total insurance premium revenue to Rs 10.9 lakh crore during the first eight months of FY 2025–26 (April–November). During the period, health insurance premiums rose 14 per cent, while new business premiums in the life insurance segment climbed 20 per cent.
This marked a sharp acceleration compared with FY 2024–25, when total premiums grew by 7 per cent to Rs 11.9 lakh crore.
According to Moody’s, the rise in premium revenue also reflects growing risk awareness among Indian consumers and the steady digitisation of the economy. Digitisation has improved the distribution and sale of insurance products, making them more accessible and supporting the insurance regulator’s long-term goal of achieving “Insurance for All” by 2047.
The report also highlighted government efforts to improve the profitability of state-owned insurers, which play a dominant role in the market. Measures include the sale of a minority stake in Life Insurance Corporation of India (LIC), proposals to recapitalise select public sector insurers subject to improved underwriting performance, and potential mergers or privatisation of state-owned companies.
Moody’s added that the increase in the foreign direct investment (FDI) limit in insurance companies to 100 per cent from 74 per cent would provide insurers with greater financial flexibility and support future growth.
. VK VAN ARN