Best’s Market Segment Report: AM Best Maintains Negative Outlook on India’s Non-Life Insurance Market

SINGAPORE–(BUSINESS WIRE)–#insuranceAM Best has maintained its negative market segment outlook on India’s non-life insurance segment, citing insurers’ reliance on investment income to offset persistent underwriting losses as a key factor.

The Best’s Market Segment Report, titled, “Market Segment Outlook: India Non-Life Insurance,” states that key lines of non-life business, including health, motor and crop insurance, have been challenged for several years by poor underwriting performance. Despite an improvement in the fiscal year ended 31 March 2021, the market’s combined ratio remained unfavourable, at 115%, compared with approximately 120% in the previous two fiscal years. The state-owned insurance companies, which accounted for 45% of earned premium in fiscal-year 2021, posted a combined ratio of over 120%. These companies help to enforce government insurance schemes and increase insurance penetration by offering lower-priced products. While this approach benefits policyholders, it constrains the insurers’ profitability. AM Best expects a deterioration in technical metrics in fiscal-year 2022, driven by a further decline in health insurance results.

Impacting these lines of business and investment returns is the ongoing pandemic and global geopolitical tensions. “The Indian equity market index has risen quite strongly in recent years,” said Trung Tran, senior financial analyst, AM Best. “However, an increase in market volatility is a risk to India’s insurers that could materially affect their capital position and investment performance.”

Additionally, according to the report, the conflict in Ukraine has led to a rise in commodity prices in India, which is creating inflationary pressure and hurting consumer sentiment. However, India has found some opportunities from the crisis—such as entering into a deal with Russia to import crude oil and increase wheat exports. AM Best expects these opportunities to mitigate some of the negative impacts of the crisis on the Indian economy.

While the segment is poised to grow strongly as the country’s economy recovers, AM Best expects India’s non-life companies to continue facing headwinds in the near to midterm from their core underwriting portfolios.

To access the full copy of this market segment report, please visit

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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Trung Tran
Senior Financial Analyst
+65 6303 5019

Kanika Thukral
Senior Financial Analyst
+65 6303 5025

Michael Dunckley, CFA
Director, Analytics
+65 6303 5020

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jeff Mango
Managing Director, Strategy & Communications
+1 908 439 2200, ext. 5204