New Delhi: As the year 2025 comes to a wrap, the insurance industry leaders bid farewell to the eventful year, calling it an inflection point mirroring broader resilience with the wider economy and are set to welcome the New Year 2026 with a bullish outlook.
In 2025, India’s insurance sector saw major shifts with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 enabling 100% FDI, fostering competition, alongside tech booms in Artificial Intelligence/Machine Learning (AI/ML) for underwriting & claims, a surge in digital policy issuance, new products like usage-based & embedded insurance, and a significant push for enhanced regulatory governance and financial inclusion, driving massive capital inflow and market growth.
Mayank Bathwal, CEO, Aditya Birla Health Insurance, said, “The year 2025 marked a clear inflection point for India’s insurance ecosystem, with policy reform and digital progress beginning to translate into real consumer impact. The removal of GST improved affordability and access, while continued advancement on platforms such as the National Health Claims Exchange and Bima Sugam helped reduce friction from purchase, servicing to claims. Together, these developments strengthened confidence in the system and supported broader adoption.”
As announced by Union Finance Minister Nirmala Sitharaman, effective September 22, individual life and health insurance premiums are exempt from Goods and Services Tax (GST), meaning the rate is 0%.
“Looking ahead to 2026, the direction is clear. Growth will be driven less by just expanding coverage and more by improving quality, consistency and trust. The next phase will focus on simpler products, faster and more predictable claims, and deeper engagement across the customer lifecycle. Insurers that prioritise transparency and long-term outcomes are poised to shape the future of the sector,” he added.
Sumit Rai, MD & CEO, Edelweiss Life Insurance, said, “2025 was an eventful year by all measures. India was tested on multiple fronts – a tariff war with the US, a brief yet tense military standoff with its neighbour (Operation Sindoor), and a rupee under persistent pressure. Yet, the economy remained buoyant, with consumption staying robust, growth accelerating, and inflation falling to record lows – a credit to India’s concerted policy efforts. It was also the year of the common man, as a cumulative 125-bps rate cut by the RBI, personal tax reforms in Budget FY26, and GST 2.0 reforms significantly improved the disposal income across households.”
“The life insurance industry mirrored this broader resilience, maintaining a strong growth trajectory amid a changing regulatory, and customer landscape. The GST exemption on life insurance products, which signalled the category as essential, boosted demand. Protection and non-participating products remained in favour as customers increasingly prioritised longer-term financial planning. The industry continued its customer awareness efforts under IRDAI’s State Insurance Plan while also expanding distribution capabilities across the country,” he said.
“The longer-term outlook for life insurance remains bullish, and the industry has been making significant strides year after year. Here are some trends likely to unfold in 2026 that continue this journey forward,” he added.
Krishnan Ramachandran, MD & CEO, Niva Bupa Health Insurance, highlighting the surge in insurance premiums, said, “Standalone health insurers recorded a robust 10.4% year-on-year growth in premiums, reaching Rs 3,622 crore (USD 422.7 million), underscoring rising consumer demand and broader adoption of health insurance coverage. Total premium income is expected to reach Rs 3.21-3.24 lakh crore (USD 37.6-37.9 billion), followed by a further growth of 10.9% in FY27. Despite prevailing macroeconomic headwinds and cost pressures, steady improvements in insurance penetration and density indicate that the sector remains firmly aligned with the long-term vision of achieving Insurance for All by 2047.”
He also said the digital transformation moved into a more mature phase in 2025 for the insurance sector.
“Over 90% of retail policies are now estimated to be issued digitally across insurers. A growing share of health claims, 60-70% in urban markets, are processed through digital or cashless modes. AI-led claims triaging and fraud detection helped insurers reduce turnaround times and improve operational efficiency,” he added.
Ramachandran also highlighted that distribution remained a key focus area as insurers worked to deepen penetration beyond metros. “The industry today engages over 30 lakh licensed insurance intermediaries, with 2025 seeing heightened investments in advisor training, digital enablement and capability-building initiatives,” he said.