After record vehicle sales in September, general insurers are betting on a pickup in motor insurance premium growth in the second half of the current financial year, driven by the ongoing festive demand and the consumption boost following the GST rate cut.
ICICI Lombard General Insurance, the country’s largest private-sector motor insurer, reported a 2.2% growth in gross direct premium income (GDPI) to ₹4,954 crore in the first half of FY26. The growth was led by a sharp 6.5% uptick in September, supported by festive demand and lower vehicle prices after the GST rate rationalisation.
“In the motor segment, our growth stood at 2.2% for H1, against the industry growth of 7.6%. While growth in the first five months was 1.3%, September witnessed a sharp uptick due to festive demand and moderation in vehicle prices attributable to the GST rate cut, taking our motor insurance growth to 6.5%,” said Sanjeev Mantri, MD & CEO, ICICI Lombard, during the company’s second-quarter earnings call.
Mantri said the company expects to sustain the growth momentum of September while remaining focused on profitable expansion.
SBI General Insurance, the largest private general insurer by overall premium, saw its motor GDPI rise 17% to ₹2,304 crore. Other insurers with a strong motor portfolio, including Shriram General, United India Insurance, and Universal Sompo General, reported 28–30% growth in their motor GDPI, led by a growth in premium collections in September.
Sales of cars, scooters, motorcycles, and three-wheelers reached all-time high levels after the rollout of GST 2.0 and the onset of the Navratri festivities on September 22. Vehicle retail sales grew 5.2% year-on-year in September to 1.827 million units, according to data from the Federation of Automobile Dealers Associations.
“The momentum in auto sales will reflect in premium collections over the next two quarters,” said a senior official at a public-sector general insurer. “Both new vehicle sales and policy renewals are expected to remain strong, which should lift the overall motor portfolio.”
The rebound comes at a time when motor insurance premium growth witnessed a slowdown in the first half of FY26 due to muted vehicle sales and the absence of price revisions in third-party motor premiums.
“The industry-wide expectation is that motor insurance premiums will rise after GST rate cut,” V Suryanarayanan, MD & CEO, Cholamandalam MS General Insurance, told FE recently. He, however, said the real impact will be clearer once the festive season concludes. “The next 45 days will show whether the growth is broad-based or just seasonal.”
Suryanarayanan said higher new vehicle registrations will also expand the base for motor third-party (TP) premium collections in subsequent years, which account for about 55% of the industry’s ₹1-lakh-crore motor insurance premiums. “For the general insurance industry, a revision in TP pricing is crucial as its share in the overall motor portfolio continues to rise,” he said.