The four public sector general insurance companies recorded a combined net loss of ₹10,050.79 crore in FY2025-26, reversing the ₹802.87-crore net profit reported in FY2024-25. This marks a setback after financial improvements over the previous two years. The primary weakness was in their underwriting operations. Their combined pure underwriting loss widened to ₹30,892.09 crore in FY26 from ₹18,366.41 crore in FY25, indicating a growing gap between premiums collected and claims and underwriting costs.
The combined ratio rose sharply to 134.37% from 121.23%. A combined ratio above 100% means claims and operating expenses exceed premium income, signaling significant pressure on the insurers' core business before considering investment income and other financial factors. This deterioration was also reflected in their solvency. Three of the four PSU general insurers reported negative solvency ratios in FY26, raising concerns about their capacity to absorb further losses and meet obligations.
A weakened solvency position can hinder maintaining adequate regulatory capital and future underwriting. Overall, FY26 figures reveal simultaneous declines in profitability, underwriting performance, and solvency among the state-run general insurers. The sharp rise in underwriting losses and the combined ratio underscores ongoing challenges in their insurance operations, while the negative solvency ratios highlight broader financial strain in the sector.
