Niva Bupa FY25: Premium up 23%, PAT jumps 91%

Strong FY25 growth, with accounting noise in focus

Niva Bupa Health Insurance reported a year of strong premium growth and higher profitability, while repeatedly pointing investors to the distortions created by the shift to 1/n accounting for long-term policies. Management said overall growth remained healthy across retail and group, but the reported number can understate the underlying momentum when compared on a like-to-like basis. For nine months on a like-to-like basis, the company cited overall growth of 26% and retail growth of 33%. It also indicated a steady-state proportion of around 20% in its mix, with the metric hovering around 20%-21% in both the previous year and the current year.

Key premium and profit numbers for FY25

For FY25, management indicated that on a like-to-like basis in terms of DWP, growth was 32%. On a 1/n basis, it said growth was 21% in FY25 over the last financial year. Net earned premium grew 28% to INR 4,894 crore. Profit after tax under IFRS rose by around 91%, from INR 106 crore in FY24 to INR 203 crore in FY25.

What the company said about GWP and the 1/n effect

The company said it closed the previous year with GWP of INR 7,406 crore, representing 32% growth without the 1/n accounting change. Management also reiterated that overall growth of 32% is a mix of retail and group, with B2B (group), attached group, and retail all growing. In addition, it flagged that revised commissions and 1/n accounting have affected how long-term policies are priced and how growth is presented in reported numbers.

H1 snapshot: GWP up 23% year-on-year

In the first half, Gross Written Premium reached INR 3,983 crore, up 23% year-on-year. The MD and CEO, Krishnan Ramachandran, said the H1 outcome reflected a focus on “growth with profitability.” He also referenced a recent GST reduction, calling it a step that recognises health insurance as essential, and said the company was seeing increased demand. The company said it remains optimistic about the health insurance sector’s growth potential in India.

Premium hikes: annual high single-digit increases

Niva Bupa said it is targeting high single-digit annual premium hikes to offset rising medical inflation and risks from an aging portfolio. In Q1, it raised rates by 7% on one product, ReAssure 2.0, and planned similar hikes on 2-3 other products. Separately, the company is reportedly considering an 8%-9% increase in health insurance premiums for FY26. Management framed the approach as moving away from infrequent, large revisions toward more regular single-digit inflation-linked increases, which it said are easier for consumers to absorb.

Growth ambition versus the sector

Management said retail remains the core focus and that it aims to grow 5-10 percentage points faster than the industry over the next 3-4 years. In an interview context, the CEO also said the industry grew around 17%-18% and that the company’s H1 growth was about 32%-33% on a like-to-like basis. The company expects to continue growing 8-10 points faster than the industry on a like-to-like basis by FY25, allowing for accounting impacts. It also stated an expectation for the India health insurance sector to grow at 17%-18% CAGR over the next five years.

Profitability and combined ratio trajectory

Niva Bupa indicated it expects to end FY25 with a combined ratio below 98%. Over the next three years, it aims to bring the combined ratio down to 95%-96% (discussed in the context of steady-state expectations). The commentary also referenced seasonal infections being relatively muted compared to last year, with an expectation that combined ratios could fall well below 98% by the end of the financial year. While the company did not provide a quarter-by-quarter bridge in the provided information, the stated targets give investors a clear framework for monitoring underwriting performance.

Industry backdrop: why retail health is the focal point

The broader context remains supportive for retail health insurance. During FY18-24, health insurance GDPI grew at 19.5% CAGR, faster than overall non-life insurance at 11.5%. Redsheer estimates put total health GDPI at INR 180,000-200,000 crore by FY28, from INR 108,000 crore in FY24. The retail segment is expected to grow at a CAGR of 18%-21%, while group business is projected at 13%-16%, reflecting differences in renewal behaviour and combined ratios.

Niva Bupa’s scale-up and capital plans

As of FY24, Niva Bupa’s overall health GDPI reached INR 5,494 crore. From FY22 to FY24, its health GDPI grew at an estimated CAGR of around 41%, nearly double the industry average cited at around 21% over that period. Management also said it is raising INR 800 crore of primary capital to fund growth amid changing industry dynamics. It expects return on net worth to improve from 5.7% in FY24 going forward, in the context of deploying fresh capital.

Key figures at a glance

What to watch next

The near-term monitorables are the pace of premium hikes, how the portfolio absorbs medical inflation, and whether combined ratio guidance plays out as stated. Investors will also track reported growth versus like-to-like growth, given management’s repeated emphasis that 1/n accounting can understate underlying expansion. Separately, any further clarity on GST changes and their impact on demand could influence sector growth trends. The company has already signalled its intent to keep retail at the centre of its strategy while aiming to outgrow the broader market.