What reforms in Union Budget 2026 will strengthen India’s insurance sector? | Expert insights

Rakesh Jain, CEO of IndusInd General Insurance, has shared his reflections and expectations ahead of the Union Budget 2026–27. According to Jain, India is in a pivotal moment where economic ambition and risk preparedness must advance hand in hand.

"With rapid formalisation, digital expansion, and rising consumer expectations, general insurance is no longer supplementary but a foundational pillar of resilience for households, businesses, and infrastructure,” he said. 

According to Jain, last year’s reforms—including GST exemption on health policies, stricter cashless claim norms, and affordability-focused legislation—have set a strong foundation for deeper transformation in the industry.

Health, homes, and MSMEs need policy support

Health insurance, the core of the general insurance market, requires continued policy backing to counter rising medical costs and enhance access, especially for vulnerable groups. Jain highlights that India’s growing mobility and infrastructure sectors need advanced risk solutions backed by stable regulation, stronger domestic reinsurance, and clear catastrophe frameworks.

He also points out the importance of insuring homes and MSMEs to protect assets and lifestyles. With urbanisation, climate-linked events, and increasing asset ownership in Tier‑2 and Tier‑3 cities, home insurance—still underpenetrated—requires tax incentives and simplified products to drive mass adoption.

Three Budget priorities for transformation

Jain outlines three key priorities for the Union Budget:

1. Accelerate digital systems

Funding and nationwide rollout of the National Health Claims Exchange and fast-tracking Bima Sugam can cut friction, fraud, and administrative costs. Interoperable digital frameworks across health, motor, home, and commercial insurance will reduce costs and improve customer service.

2. Strengthen domestic reinsurance and regulation

Expanding infrastructure, mobility, cyber, and property coverage requires strong local reinsurance and long-term regulatory stability. Incentives for homegrown risk capital, innovation-driven underwriting, and technology adoption—like AI risk scoring and satellite-based property assessment—will enhance industry maturity.

3. Build climate and MSME resilience

A National Catastrophe Risk Pool is essential amid rising floods, cyclones, and heat-related losses. The Budget should support sovereign catastrophe bonds, micro-insurance, and parametric products for high-risk areas, while enabling cybersecurity, data governance, and insurance workforce skilling.

Path to inclusive growth

Jain concludes that a forward-looking Budget positioning general insurance as essential economic and social infrastructure—focused on digital enablement, affordability, home and MSME protection, and climate-risk financing—can deepen insurance penetration and support India’s long-term, resilient growth.