Gross written premium (GWP)

What is gross written premium?

Gross written premium (GWP) is the total premium an insurer has written in a period, before any premium is passed on to reinsurers. It is the broadest measure of an insurer's sales and the starting point for most financial ratios. In life insurance, GWP is the sum of first year premium, single premium and renewal premium. In general and health insurance, GWP is the premium on policies the insurer writes directly plus any reinsurance business it accepts from other insurers.

"Gross" means before reinsurance. Once premium ceded to reinsurers is deducted, the result is net written premium. Once the part relating to future periods is set aside as unearned premium, the result is earned premium.

How GWP is defined and measured in India

For life insurers, the IRDAI annual report shows total premium of ₹8.86 lakh crore in 2024-25, growth of 6.73%, made up of new business premium of ₹3.98 lakh crore (44.91%) and renewal premium of ₹4.88 lakh crore (55.09%).

For non-life insurers, gross direct premium within India was ₹3.08 lakh crore in 2024-25, growth of 6.19%. Health (including personal accident) was the largest segment at 41.42% of premium, followed by motor at 32.21% (IRDAI Annual Report 2024-25).

The 1/n change for long-term non-life policies

From 1 October 2024, IRDAI required general and health insurers to recognise premium on long-term policies (such as multi-year health policies) on a 1/n basis, spreading it over the policy years instead of booking it all in the year of sale. This lowered reported GWP growth for insurers with large multi-year books for a period, even where sales were unchanged. ICICI Lombard, for example, reported GDPI de-growth of 0.5% for April to September 2025, but growth of 4.2% excluding the 1/n effect.

Worked example (illustrative numbers)

A general insurer writes ₹1,000 crore of direct premium, accepts ₹50 crore of reinsurance from other insurers and cedes ₹250 crore to reinsurers.

• GDPI = ₹1,000 crore
• GWP = 1,000 + 50 = ₹1,050 crore
• NWP = 1,050 minus 250 = ₹800 crore
• Net retention ratio = 800 ÷ 1,050 = 76%

What GWP means for distribution

• GWP is the headline, not the whole story. In life insurance, a jump in GWP driven by single premium savings business can mean little for profit. Distribution leaders should read GWP together with APE and value of new business.
• Renewal premium is a distribution outcome. More than half of life GWP is renewal premium. That share depends on the persistency of what channels sold in earlier years.
• It sets expense headroom. The IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024 cap general insurers' expenses at 30% of GWP and standalone health insurers' at 35%. IRDAI's September 2026 consultation paper proposed moving the base to domestic GDPI with lower limits, which would reduce the room for commission and channel spending if adopted.
• Market share is quoted on GDPI. General insurers' rankings in the trade press use GDPI from General Insurance Council data, so a distributor negotiating with an insurer should know which base a share figure uses.
• Watch accounting changes. The 1/n rule and the move to Ind AS from April 2026 change how premium is recognised, so year-on-year GWP comparisons around those dates need care.