Fire Insurance Premiums Fall 28% in April-July as Aggressive Discounting on Large Industrial Risks Continues
Fire insurance premiums declined 28% in April-July as insurers continued aggressive discounting on large industrial risks. The trend points to intensifying competition and pricing pressure in the commercial insurance market.
Fire insurance premiums fell 28% during April-July, reflecting continued aggressive discounting in large industrial risks.
New Delhi – Fire Insurance Premiums: Gross direct premium collected under the fire insurance segment fell 28% to ₹10,062 crore in the first four months of the current financial year, April-July, from ₹14,063 crore in the same period last year, according to industry data compiled by the General Insurance Council (GIC).
The decline comes as general insurers continue to compete aggressively on pricing for large corporate and industrial fire risk accounts, a trend that has drawn regulatory scrutiny in recent months.
Fire Insurance Premiums: Discounting Pressure on Large Corporate Accounts
“Aggressive pricing has increased pressure on insurers competing for large corporate accounts,” the chief executive of a large general insurance company said, commenting on the trend in the fire segment.
The Insurance Regulatory and Development Authority of India (IRDAI) has received complaints of discounts running as high as 99% on large industrial fire risks, raising concerns within the regulator over the impact of such pricing practices on insurers’ financial health and underwriting discipline.
In a communication addressed to managing directors and chief executive officers of general insurance companies, the regulator said pricing for large industrial and commercial fire risks should be grounded in sound actuarial principles. The regulator noted that fire risks are low-frequency, high-severity exposures, where a single claim can amount to several times the premium collected on the risk.
Fire Insurance Premiums: Impact Visible Across Large Insurers
The effect of the pricing pressure was visible across most large fire insurance underwriters during the April-July period, per GIC data:
- New India Assurance reported fire premiums of ₹1,681 crore, down from ₹2,241 crore a year earlier.
- ICICI Lombard reported ₹1,248 crore against ₹1,815 crore in the year-ago period.
- Go Digit General Insurance brought down fire premium to ₹223 crore from ₹413 crore.
- Bajaj General Insurance reported ₹1,114 crore compared with ₹1,452 crore a year ago.
- Tata AIG General Insurance reported ₹940 crore against ₹1,122 crore.
- United India Insurance reported ₹748 crore compared with ₹965 crore.
- HDFC ERGO General Insurance reported ₹687 crore, down from ₹1,024 crore.
- SBI General Insurance reported ₹496 crore against ₹742 crore.
Fire Insurance Premiums: Fire Segment’s Share of Overall Non-Life Premium
The fire segment accounted for about 8.4% of the ₹1.19 lakh crore in gross direct premium written by non-life insurers in India during April-July, GIC data showed.
On a full-year basis, fire insurance premiums had risen to ₹27,432 crore in FY25-26 from ₹24,188 crore a year earlier, with public-sector insurers posting 19.93% growth in the segment and private insurers growing 9.9%, according to the data.
The full-year FY25-26 growth in fire premiums stands in contrast to the 28% decline recorded in the April-July period of the current financial year, underscoring the extent to which discounting on large industrial and commercial fire risk accounts has weighed on the segment in recent months, GIC data showed.
Public-sector insurers, led by New India Assurance, and private players, including ICICI Lombard, Tata AIG, HDFC ERGO and Go Digit, together account for the bulk of fire insurance underwriting in the country, per the data cited above, making the segment’s pricing trends a closely watched indicator of overall underwriting discipline in the general insurance industry.
The divergence between the full-year growth reported for FY25-26 and the sharp decline recorded in the opening four months of the current financial year suggests that the discounting pressure on large industrial and commercial fire risk accounts has intensified more recently, according to the GIC data reviewed. Since fire insurance is classified as a low-frequency, high-severity line of business, sustained reductions in premium income without a corresponding reduction in exposure have implications for reserve adequacy and claims-paying capacity across the industry, a concern IRDAI has flagged directly to insurers’ leadership in its communication on pricing discipline. The regulator’s intervention places renewed emphasis on actuarial pricing over volume-driven competition for large corporate accounts.
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