Reinsurance renewal conditions at 1 April in the Indian market were notably more favourable, compared to renewals a year ago, says Aon, a leading global professional services firm providing a broad range of risk, retirement and health solutions.
In the report titled “Reinsurance Market Dynamics – April 2025 Renewal”, Aon notes that 1 April saw increased capacity and reinsurer engagement resulting in modest reductions in risk adjusted rates.
1 April is the main renewal for India, with most insurers purchasing reinsurance protection, across all lines of business.
India’s insurance market continues to develop at a pace, creating opportunities for insurers and reinsurers alike. Demand remains strong, supported by a growing economy and low penetration rates, as well as emerging opportunities from specialty lines, such as cyber and surety, as well as agriculture and health insurance.
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Topic
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Commentary
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Cat capacity expands
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Reinsurance market conditions were much improved at the April renewal, with increased levels of competition, capacity and engagement; many reinsurers went the extra mile and made in-person visits to local insurers. With reinsurers keen to grow, most placements achieved single-digit reductions for property reinsurance, compared with slight increases in 2024 and 2023.
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Regulatory changes
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The introduction of collateral requirements for cross-border reinsurance, which came into effect for the 2025 financial year, was a notable feature of renewal discussions. In order to comply with the new requirements, most cross-border placements opted to hold premium reserves, rather than letters of credit.
Separately, the industry players reintroduced minimum pricing for property insurance from 1 January, leading to a correction in underlying rates. The move is likely to improve the performance of proportional reinsurance treaties, and potentially signal better ceding commissions in a competitive market. India’s FDI policy is expected to be relaxed with foreign insurers allowed to have 100% of the shareholding.
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Strong underlying demand
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Demand for reinsurance in India remains strong, leading to a moderate increase in required capacity. Most placements are purchasing limits as expiring, although reinsurers are pushing for increased deductibles for catastrophe excess of loss, leading to a slight increase in overall reinsurance capacity. Reinsurance demand is also supported by India’s fast-growing insurance market, driven by government initiatives to close protection gaps, economic growth, and increasing natural catastrophe exposures.
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Nat CAT and fire losses
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While 2025 has not yet seen a major catastrophe loss event in India, insurers paid losses last year from Cyclone Remal, as well as widespread flooding events in May, August and September. Losses in emerging markets like India and China are accounting for an increasing portion of global catastrophe losses due to rapid economic growth and urbanization in recent years. There were also several large fire losses affecting the power sector, which are likely to impact treaty and per-risk reinsurance renewal negotiations for affected insurers, although these claims are currently still outstanding.
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Cyber boost
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Demand for cyber reinsurance is set to increase as insurers respond to growing demand for standalone cyber insurance from Indian companies. Historically, limited reinsurance protection for cyber is provided under Indian insurers' liability reinsurance treaties. In order to expand their appetite and write standalone cyber cover, insurers will increasingly require dedicated cyber reinsurance capacity and expertise in coming years. With its thriving technology sector and growing awareness of cyber risk, India’s cyber insurance market is growing rapidly.
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Surety, life and health opportunities
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Reinsurance demand is increasing from India’s burgeoning surety market, a product that was until recently offered only by banks. With support from the government, India’s insurers are now launching surety products, creating demand for reinsurance protection in this growing sector. Reinsurers will also find growing opportunities in health in coming years, as more insurers launch health insurance products under the Indian government’s subsidized scheme.
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Agriculture
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India is one of the world’s largest agriculture insurance markets behind the US and China, although the bulk of state schemes purchase their reinsurance on multi-year deals, which are next up for renewal in 2026. Ahead of these key renewals, the sector continues to receive the strong support of reinsurers, having produced positive results for the past five years. There will be an opportunity for further Indian states to join the government scheme in 2026, creating additional potential demand for reinsurance capacity. Stop-loss agriculture treaties, which are renewed annually, can expect modest reductions in rates at renewals, owing to recent positive performance.
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Emerging products
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The nascent livestock and aquaculture markets will provide a future source of growth opportunity for both insurers and reinsurers. The Indian government is currently looking to leverage technology solutions to expand the national livestock insurance scheme and take it to the next level. While still a small market, insurers are in the early stages of exploring products for India’s growing aquaculture sector. Both developments will increasingly need reinsurers' capacity and expertise.
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