India’s insurance sector is entering a new stage of development, driven by regulatory reform, rising demand and the rapid growth of GIFT City, says Peak Re’s Sudhir Salian.

India’s insurance market reached an estimated $151 billion in total premiums in 2025, making it the 10th largest worldwide. However, India’s total insurance penetration remained relatively low, at 3.7% for FY2024/25, compared with the global average of 7.3%.

Acknowledging the importance of insurance for economic and societal development, India’s government has set itself the goal of “Insurance for All” by 2047, seeking to broaden access to life, health and property insurance for citizens and businesses. The development of Gujarat International Finance Tec-City (GIFT City) forms part of the broader effort to support the continued growth of the insurance sector.

Peak Re was among the first group of reinsurers to receive a GIFT City licence in early 2025, enabling us to write both non-life and life reinsurance in India. Despite an evolving regulatory landscape, GIFT City attracted 22 new reinsurers with a total of 36 insurance entities by the end of the first quarter of 2026. Premiums quadrupled to approximately $650 million by June 2026 and are forecast to touch $1 billion by end of the year.

Benefiting from our first-mover advantage, Peak Re’s operations have gained substantial traction since we received our branch licence. In April 2026, we completed the second renewal of our portfolio from GIFT City. We are now among the larger reinsurers operating in GIFT City and among the relatively few participants offering both life and non-life reinsurance solutions.

Reflecting global trends, excess reinsurance capacity has been further amplified in India by the entry of additional reinsurers into the onshore market, increasing local capacity. This has contributed to softer pricing, mirroring the sharp rate adjustments in the direct property insurance segment. Direct clients are leveraging the lower pricing environment to secure higher sums insured, partially offsetting premium compression. However, this trend — combined with rising aggregate exposure, continued rate erosion and several risk losses during the year, including at least one flood event loss — has heightened our focus on portfolio dynamics. We continue to closely monitor these developments, and the impact on renewals at April 1, 2027, is expected to be particularly noteworthy.

Despite these pressures, the market’s fundamental drivers remain relatively robust and continue to provide support. According to the IMF, India’s GDP grew by 7.3% in FY2025/26.

While growth is expected to moderate, it is forecast to remain above 6%. India’s significant protection gap also continues to support underlying demand for insurance. At the same time, government initiatives and investment are contributing to the development of a number of segments, particularly life, health and agricultural insurance.

Furthermore, the change in regulation allowing 100% foreign direct investment in insurance is also spurring interest in the country’s insurance sector, accelerating premium growth. There is also interest from the domestic market with two new reinsurers established. In parallel, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated the phased introduction of IFRS 17 for the country’s onshore insurers, effective this year.

Looking ahead, IRDAI is advancing plans for risk-based capital and risk-based solvency frameworks. These measures are expected to support more risk-sensitive capital management and may influence direct insurers’ demand for reinsurance protection over time.

Against this evolving backdrop, India continues to be an important market within Peak Re’s portfolio. We underwrite a broad spectrum of risks across multiple classes of business, including property, engineering, motor, health, credit and surety, agriculture, structured solutions and life insurance. In our branch, we have built an on-the-ground team of senior underwriters who understand the market and are able to deepen our partnership with cedants. They are supported by the team based in Hong Kong, which has strong expertise across product management, analytics and modelling, as well as claims management and payments.

As a relatively young reinsurer, Peak Re seeks to remain agile and responsive to changing market needs. Alongside providing reinsurance solutions, we continue to invest in talent development and knowledge-sharing initiatives, including seminars on catastrophe modelling, insurance-linked securities, IFRS 17 implementation and emerging risks such as cyber exposures and electric vehicles. As GIFT City develops its role as an international insurance and reinsurance centre, we will continue to contribute through our underwriting experience, technical capabilities and continued engagement with local market participants.

Based on this, we remain cautiously optimistic and continue to closely study the development of the Indian market.