IIRM Holdings India Ltd Management Discussions

Industry Overview

The general insurance industry across the Groups operating geographies continues to offer a favourable long-term growth outlook. The sector is supported by low insurance penetration, sustained economic growth, infrastructure investment, resilient domestic demand, increasing protection awareness, rising healthcare needs and continued demand for motor insurance. Regulatory reforms and digital penetration are also expanding access to insurance and encouraging more structured risk management across individuals, MSMEs and corporates. Concurrently, platform-led distribution, data analytics, automation and enhanced claims servicing are reshaping the insurance value chain, creating opportunities for brokers with strong local market understanding, specialised risk capabilities and technology-enabled service models.

Economic Overview and Outlook

The global macroeconomic environment during the year remained resilient, though growth momentum was moderate and uneven across regions. Easing inflation, stable financial conditions and technology-led investments supported economic activity in several markets. However, geopolitical tensions, tariff- related uncertainties, export controls and volatility in global trade policies continued to influence cross-border trade, investment decisions and business confidence.

As per the International Monetary Funds World Economic Outlook, April 2026, global growth is projected at 3.1% in 2026 and 3.2% in 2027, indicating steady but modest expansion. Global headline inflation is expected to moderate from 4.4% in 2026 to 3.7% in 2027. While this reflects continued progress towards price stability, the trajectory remains subject to risks arising from energy price movements, supply-chain disruptions, monetary policy divergence and financial-market volatility.[1]

Geopolitical developments, particularly in the Middle East and the continuing uncertainty in US-China trade relations, remained key areas of concern. Any disruption to energy infrastructure, strategic shipping routes or global supply chains could affect commodity prices, freight costs and input costs across industries. Such developments may also have a bearing on consumer demand, corporate profitability and overall economic sentiment.

Advanced economies are expected to grow at a subdued pace of around 1.7% to 1.8% during 2026 and 2027, reflecting structural challenges such as ageing demographics, productivity constraints and the lagged impact of earlier monetary tightening. Emerging and developing economies are projected to grow at about 3.9% to 4.2%, supported by domestic demand, infrastructure investment and favourable demographics, though they remain exposed to external financing conditions, currency volatility and commodity price movements.

Against this backdrop, India continued to remain one of the fastest-growing major economies, supported by resilient domestic demand, sustained public capital expenditure, improving private investment activity, digital adoption and ongoing policy reforms. The IMF projects Indias growth at 6.5% in both 2026 and 2027, following an estimated 7.6% expansion in 2025. The strength of domestic consumption and investment activity is expected to provide a degree of insulation against external uncertainties, although global trade and commodity market developments remain important monitorable.[1][2]

Indias inflation environment remained broadly manageable during FY2026, supported by easing food and fuel prices and contained core inflation. The Reserve Bank of India maintained the policy repo rate at 5.25% in April 2026 with a neutral stance, balancing the objective of supporting growth with the need to preserve price and financial stability. Monetary conditions are expected to remain guided by evolving inflation trends, liquidity conditions and external risk factors.[3]

In the external front, Indias position remained relatively stable, aided by strong services exports, resilient remittance flows and adequate foreign exchange reserves. The current account deficit narrowed to 0.8% of GDP in the first half of FY2026, providing a buffer against global financial- market volatility. Nevertheless, higher crude oil prices, freight costs, geopolitical tensions, currency movements and slower global demand continue to be areas that require close monitoring. [4]

Overall, the economic outlook remains cautiously optimistic. While the global economy is expected to grow at a moderate pace, downside risks persist from geopolitical fragmentation, trade-policy uncertainty, commodity-price volatility, elevated public debt and financial-market movements. Indias growth prospects continue to be supported by domestic demand, infrastructure spending, a resilient services sector, digital transformation and a stable policy framework. The Company remains watchful of evolving macroeconomic conditions and will continue to monitor external developments, inflation trends, interest-rate movements and sector-specific risks that may influence the operating environment.

References

^International Monetary Fund, World Economic Outlook, April 2026: Global Economy in the Shadow of War.

2. Ministry of Statistics and Programme Implementation, Government of India / Press Information Bureau, GDP Estimates for FY 2025-26.

3. Reserve Bank of India, Monetary Policy Statement, 2026-27, Resolution of the Monetary Policy Committee, April 6 to 8, 2026.

4. Reserve Bank of India, Balance of Payments / Current Account Data for FY 2025-26.

Global Insurance Outlook

The global insurance industry continues to demonstrate resilience, although growth is expected to moderate following a strong rebound in 2024. Swiss Re Institute estimates that total global insurance premiums grew by 5.2% in real terms in 2024 and are projected to grow by approximately 2.0% in 2025 and 2.3% in 2026. This moderation reflects slower global economic growth, policy uncertainty, trade-related friction and continued affordability pressures, particularly in segments exposed to inflation-sensitive claims such as motor, construction and property.

Commercial insurance pricing conditions have also become more competitive. Marshs Global Insurance Market Index reported a 4% decline in global commercial insurance rates in the second quarter of 2025, representing the fourth consecutive quarterly decline. Property, cyber, and financial and professional lines experienced softer pricing across several regions, while casualty remained an exception due to higher claims severity and large liability awards, particularly in the United States.

Natural catastrophe losses continue to influence underwriting discipline and reinsurance capacity. Munich Re reported global natural catastrophe losses of approximately USD 320 billion in 2024, of which USD 140 billion were insured losses. These figures underscore the widening protection gap and the increasing relevance of climate risk, severe convective storms, floods, hurricanes and other secondary perils in portfolio management.

Technology-led transformation remains a defining theme for the industry. Artificial intelligence, automation, embedded insurance, advanced analytics, platform-led distribution and digital claims servicing are increasingly being deployed to enhance underwriting, customer engagement, claims efficiency, fraud control and product personalisation. At the same time, emerging risks, including cyber threats, climate change, supply chain disruption and professional liability, continue to increase demand for specialist insurance advice and structured risk solutions.

For insurance brokers, the global outlook remains constructive. While premium growth and pricing momentum may moderate, clients are increasingly seeking expert guidance to address coverage complexity, changing risk exposures, claims inflation, capacity constraints and evolving regulatory expectations. Brokers with strong technical expertise, insurer and reinsurer relationships, data capabilities and client-focused advisory services are expected to remain central to the development of resilient and cost-effective insurance programmes.

Market Snapshot

Market	Current GWP	YoY Growth	5-Yr CAGR	Dominant Lines
India	Rs3.36 Lakh Cr	9.30%	16%	Health, Motor
Sri Lanka	USD 0.45 Bn	10.90%	10%	Motor, Fire & Engineering Tourism,
Maldives	MVR 1.6 Bn	22.00%	18%	Property/Ma rine, Health
Kenya	KES 205.3 Bn	7.90%	15%	Motor, Medical, Property

Country-wise General Insurance Industry Landscape

India Insurance Industry

Scale, Health-Led Growth and Structural Headroom

India remains one of the most attractive general insurance markets globally, supported by sustained economic growth, infrastructure development, formalisation, resilient domestic demand, increasing healthcare awareness and regulatory initiatives aimed at widening insurance access. The market continues to be led by health and motor insurance, with health gaining prominence on account of medical inflation, rising group insurance demand, employer-sponsored benefits, increased retail protection requirements and greater customer awareness.

General insurance penetration remains significantly below developed-market benchmarks, indicating substantial long-term headroom. The broker channel has expanded meaningfully, particularly in group health, employee benefits, corporate risk, MSME insurance, liability, cyber and specialty placements. This provides a strong opportunity for advisory-led brokers with capabilities in claims management, risk assessment, data analytics, customised programme design and sector-specific product innovation.

While motor insurance remains a large and stable segment, pricing pressure, claims inflation, fraud risk and cost efficiency challenges continue to affect profitability. Accordingly, future profitable growth is expected to be driven by health, MSME insurance, liability, cyber, specialty lines, employee benefits, disciplined underwriting, stronger claims oversight and technology-enabled distribution.

Sri Lanka Insurance Industry

Recovery-Led Opportunity in Corporate Lines

Sri Lankas insurance market is gradually recovering alongside broader economic stabilisation. Motor insurance continues to account for a significant share of the general insurance market; however, renewed business activity, infrastructure spending and corporate investment are expected to support demand for fire, engineering, marine, liability and employee benefit solutions.

The broker channel is expected to benefit as clients seek structured risk advice, improved programme design and access to competitive insurance and reinsurance capacity. As the market normalises, opportunities are likely to emerge in corporate insurance, project-linked covers, health benefits and risk advisory services.

Maldives Insurance Industry

Tourism, Marine and Climate-Linked Risk Demand

The Maldives represents a focused but high-growth insurance market, closely linked to tourism, hospitality, marine activity, property assets and climate-related exposures. The concentration of economic activity around tourism and resort infrastructure creates specialised insurance requirements, including property, marine, travel, health and catastrophe-linked protection.

Given the limited local risk-bearing capacity, disciplined reinsurance support remains central to market stability. Brokers with access to regional and international capacity, together with hospitality and marine sector expertise, are well positioned to assist clients in managing asset protection, business interruption and climate resilience requirements.

Kenya Insurance Industry

Digital Distribution and Inclusive Insurance Growth

Kenya continues to be one of the more dynamic insurance markets in Africa, supported by digital adoption, mobile money ecosystems, medical insurance demand, agriculture-linked protection and microinsurance. These factors are expanding access to insurance and enabling new distribution models for retail, SME and affinity-based products.

The market also faces challenges arising from motor claims leakage, medical inflation and affordability constraints. Strong analytics, disciplined underwriting, claims oversight and embedded insurance partnerships will therefore be important for sustainable growth.

Opportunity Map Broker Lens

Health and medical insurance remain among the most attractive segments across the Groups geographies. In India, MSME, liability, cyber, speciality, and employee benefit lines are expected to gain relevance as formalisation and risk awareness improve. Sri Lanka demonstrates momentum in engineering and fire-related corporate lines, while the Maldives presents niche opportunities in travel, marine, property and catastrophe-linked products.

Segment	India	Sri Lanka	Kenya	Maldives
Health / Medical	High	Medium	High	High
Motor	Medium	High	High	Medium
Fire & Property	Medium	High	Medium	High
Engineering / Projects	High	High	Medium	Medium
Marine / Travel	Low	Medium	Medium	High
Specialty / Liability	Medium	Low- Medium	Medium	Medium

Outlook and Strategic Priorities

Across the Groups markets, health and medical insurance remain the most consistent growth opportunity, supported by rising healthcare costs, employer-sponsored benefits and increasing retail awareness. India offers scale and long-term penetration-led growth, with additional opportunities in MSME, liability, cyber, specialty and employee benefit solutions. Sri Lanka provides recovery-led upside in corporate and project-linked lines, the Maldives presents niche opportunities in tourism, marine, property and climate-linked protection, and Kenya offers growth through digital distribution, mobile ecosystems and inclusive insurance models.

Broker participation is increasing across markets as customers seek improved advice, broader product access, stronger claims support and assistance in managing emerging risks. This trend is expected to favour brokers with specialised domain expertise, technology-enabled servicing, strong insurer and reinsurer relationships, disciplined claims oversight, data capabilities and the ability to deliver tailored solutions across corporate, MSME, retail and specialty segments.

For IIRM Holdings, strategic priorities include deepening advisory capabilities, expanding health and employee benefits solutions, strengthening MSME, specialty, liability and cyber lines, enhancing analytics and claims management, leveraging digital platforms, improving cost efficiency, supporting product innovation, and building robust insurer, reinsurer and risk management partnerships across geographies.

Financial Performance

In FY26 delivered strong revenue growth with total revenue rising to Rs2,537 million from Rs2,209 million in FY25, representing growth of 14.82%. Our Gross Written Premium {GWP) portfolio expanded to Rs16,112 million from Rs13,268 million, reflecting 21% growth driven by strength in Motor, and Others and Property and Engineering verticals. EBITDA for the year was Rs596 million compared to Rs471 million in FY25, with EBITDA margin at 23.5% versus 21.4% in the previous year. Profit after tax stood at Rs243 million compared to Rs216 million in FY25.

Internal Controls

IIRM Holdings India Limited maintains a comprehensive internal control framework to support operational efficiency, accuracy in financial reporting, and adherence to regulatory requirements. The system is structured to provide reasonable assurance in achieving objectives related to effective operations, reliable financial information, and compliance. Internal controls are periodically reviewed and audited, allowing the company to identify gaps and implement necessary corrective measures. The Audit Committee works closely with management to supervise these processes, ensuring alignment with strategic direction and risk management standards. This established approach safeguards company assets and enhances operational stakeholder trust.

Disclosure of Accounting Treatment

Where in the preparation of financial statements, a treatment different from that prescribed in an Accounting Standard has been followed, the fact shall be disclosed in the financial statements, together with the managements explanation as to why it believes such alternative treatment is more representative of the true and fair view of the underlying business transaction.