A look at key changes and trends in India’s insurance sector in 2025

As 2025 draws to a close, India’s insurance industry is being seen as entering a transformative phase, marked by policy reforms, stronger consumer adoption, and accelerated digitalisation.

Despite global uncertainties and domestic challenges, insurers ended the year on a confident note, well-positioned for sustainable growth.

A major milestone was the Parliament’s approval of the Sabka Bima, Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, allowing 100% foreign direct investment in the sector.

Experts say the move is expected to attract long-term global capital, boost competition, and drive innovation in products, technology, and risk management.

Reflecting on this, Naveen Chandra Jha, MD & CEO, SBI General Insurance, said, “The FDI reform strengthens India’s ambition to build a globally competitive insurance ecosystem by attracting long-term capital, enabling access to global expertise, and accelerating innovation. It reinforces the three A’s of insurance—awareness, accessibility, and affordability—aligning stakeholders with the vision of Insurance for All by 2047.”

Another significant policy initiative was the GST exemption on individual life and health insurance premiums,

effective September 2025.

By bringing the tax rate to 0%, the move improved affordability and positioned insurance as an essential financial product, spurring renewed consumer interest.

Digitalisation emerged as a defining theme in 2025.

Platforms such as Bima Sugam and the National Health Claims Exchange simplified customer interactions, while artificial intelligence and machine learning enhanced underwriting, claims processing, and fraud detection.

Mayank Bathwal, CEO, Aditya Birla Health Insurance, observed, “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 life and health insurance segments showed robust growth.

Sumit Rai, MD & CEO, Edelweiss Life Insurance, noted, “The GST exemption boosted life insurance demand, while consumers increasingly focused on protection-oriented and non-participating products for long-term financial planning.” Health insurance also gained momentum, with standalone health insurers recording double-digit premium growth, reflecting deeper penetration and rising awareness. Total premiums are expected to reach ₹3.21–3.24 lakh crore.

Operationally, Krishnan Ramachandran, MD & CEO, Niva Bupa Health Insurance, highlighted that “Over 90% of retail policies are now estimated to be issued digitally. AI-led triaging and cashless claim processing are improving efficiency, while distribution remains robust with over 30 lakh licensed intermediaries across the country.”

Looking ahead, the industry consensus is that growth in 2026 will be driven by trust, simplicity, and service quality, supported by policy reforms, capital inflows, and technology-led efficiency. With these drivers, India’s insurance sector appears set to deepen its role in the country’s long-term economic and social security framework.