India’s general insurance industry is entering a more mature phase, with insurers increasingly prioritising sustainable pricing over pure volume and converting scale into more disciplined, profitable underwriting, according to Boston Consulting Group (BCG’s) sectoral roundup.

The report, which covers 34 general and standalone health insurers, said private insurers demonstrated resilient underwriting performance through FY26, with their combined ratio broadly steady at 109%, improving marginally by 0.4 percentage points. Combined ratio measures an insurer’s underwriting profitability, with a ratio below 100% indicating an underwriting profit.

Private insurers’ return on equity (ROE) stood at nearly 9%, down just 56 basis points during the year. Large private insurers were the standout performers, combining 7% premium growth with a 2–3 percentage point improvement in both loss ratio and combined ratio, while lifting ROE to 15% from 14%. This, BCG said, highlights that scale and underwriting discipline can go hand in hand.

The four public sector insurers saw their combined ratio worsen to 128%, while ROE fell to -4% from 2%. BCG described this as a period of “active recalibration” as these insurers work through legacy pricing and claims dynamics. Continued underwriting reforms are expected to narrow the gap over time.

“The Indian general insurance industry continues to grow, and it is entering a more mature phase,” said Pallavi Malani, Managing Director & Partner at Boston Consulting Group and India Lead – Insurance. “The real story in FY27 is which insurers are successfully converting scale into disciplined, profitable underwriting.”

The general insurance industry closed FY26 with gross direct premium income (GDPI) of ₹3.36 lakh crore, up 9% with private insurers, including standalone health insurers (SAHIs), continuing to lead market expansion. Private insurers grew GDPI by 10%, compared with 8% for public sector insurers.

Growth was led by health insurance, where GST rationalisation lifted full-year growth to 17%, compared with 10% in the first half. Motor insurance grew close to 9%, although renewal-heavy portfolios limited the full pass-through of the 10.4% rise in auto sales. Fire and crop insurance grew more modestly as insurers leaned into pricing discipline on commercial renewals and calibrated crop discounting to meet Expense of Management (EOM) guidelines.

“These are the early signs of a market beginning to prioritise sustainable pricing over pure volume,” BCG said.

Profitability varied significantly across lines of business, reflecting the different stages of development of each segment. Health, the fastest-growing segment, posted a negative 7% ROE in FY26 as insurers continued to invest in scaling retail health distribution and infrastructure. Fire and crop were the most profitable lines, generating ROEs of 17% and 13%, respectively.

Within motor insurance, third-party business generated a strong industry-wide ROE of 22%, compared with -34% for own-damage insurance, highlighting scope for insurers to optimise portfolio mix and claims management. Standalone health insurers also increased their share of industry GDPI by two percentage points, reflecting continued momentum in retail health.

The industry’s capital and reinsurance position remained sound overall. Most private insurers remained comfortably capitalised and above the regulatory solvency margin of 1.5 times. However, public sector insurers other than New India Assurance have relatively less solvency headroom, making capital strength an area of continued focus.