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The general insurance industry continued to reported strong growth in premiums with Sep’25 growth at 13% YoY, reporting INR 312bn on an unadjusted (reported) basis. This follows weak growth of 2% YoY in August and 3% in July, resulting in YTD FY26 growth of 7% till Sep’25. However, the strong growth was due to AIC (Agriculture Insurance Company of India), which accounted for 85% of the growth. Excluding AIC, industry growth was limited to 2%. Premiums for private, multi-line players grew 2% YoY while SAHI and public insurers grew 3% and 2% YoY, respectively. Till August, industry growth has tapered this year majorly due to decline in the crop segment (~9% share) while the fire segment has seen strong growth (~10% share); however, crop appears to have grown strongly this month. We expect growth for the sector to be 3-4% higher on a like-to-like basis, once the base normalises from October. With growth concerns around the industry, we prefer ICICIGI in the general insurance space, which has delivered consistent profitability.

*  Key multi-line players back to YoY growth: Private multi-line players reported 2% YoY growth in premiums in Sep’25, in line with Aug’25; growth in PSUs was lower at 2% YoY vs. a strong 15% YoY growth in August. Within private multi-line players, Bajaj Allianz reported sluggish growth of 31% YoY on the back of 19% growth in Aug’25 and ICICI Lombard saw 6% YoY growth, gradually improving over the year. Go Digit also continued its healthy growth momentum at 10% YoY vs. 14% YoY in Aug’25.

* SAHI growth moderated: SAHIs grew at 3% YoY in Sep’25 vs. 4% YoY in Aug’25. Amongst SAHIs, Star Health posted 3% YoY growth (vs. 2% YoY in Aug’25). For 1QFY26, Star’s growth, adjusted for 1/n accounting, came in at a respectable 13.2%, despite the company cutting down on the group business. Aditya Birla Health continued its strong growth momentum with 11% YoY growth (37% YoY in Aug’25 and 25% YTD FY26).

*Valuations and view – prefer ICICIGI with improving growth and strong profitability: With improved growth, we prefer ICICI Lombard in general insurance, valuing the insurer at 34x FY27e EPS of INR 67 to get a target price of INR 2,250. For Star Health, we wait for stability in claims for a couple of quarters, we have a HOLD rating on Star Health, valuing it at 21x FY27e EPS of INR 20 to get a target price of INR 420.

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