Context:
In FY25, the life insurance sector witnessed a 5.13% growth in new business premiums (NBPs), reaching ₹3.97 trillion, compared to ₹3.77 trillion in the previous year. This growth rate reflects a slight improvement over the previous year’s 2% increase.
- Growth in NBP: ₹3.97 trillion (5.13% YoY)
- Previous Year: ₹3.77 trillion (2% YoY growth)
LIC and Private Life Insurers’ Performance
- Life Insurance Corporation of India (LIC):
- NBP Growth: 1.86% YoY growth to ₹2.27 trillion.
- Market Share: LIC held 57% of the market.
- Private Sector Life Insurers:
- NBP Growth: 9.8% YoY growth to ₹1.71 trillion.
- Market Share: Private insurers account for nearly 43% of the market.
Key Players’ Performance
- SBI Life Insurance:
- NBP: ₹35,576.67 crore (7% decline).
- HDFC Life Insurance:
- NBP: ₹33,761.94 crore (12.58% growth).
- ICICI Prudential Life Insurance:
- NBP: ₹22,583.49 crore (24.9% growth).
- Axis Max Life Insurance:
- NBP: ₹12,173.41 crore (10.5% growth).
- Bajaj Allianz Life Insurance:
- NBP: ₹12,292.58 crore (6.7% growth).
Regulatory Impact
- Regulatory Changes: The Insurance Regulatory & Development Authority of India (IRDAI) revised the surrender value norms effective from October 1, 2024, affecting growth across most product categories, particularly in the second half of FY25.
- Group Single Premiums: Growth remained flat amid the current interest rate environment, making insurance products less attractive compared to other investment options.
Individual vs. Group Premiums
- Individual NBP: Grew by 11.3% YoY to ₹1.67 trillion in FY25 (compared to ₹1.5 trillion in FY24).
- Group Business Premium: Rose by 1.07% YoY to ₹1.64 trillion.
The life insurance sector showed positive growth in new business premiums during FY25, with a solid performance by private insurers. However, the impact of regulatory changes and the interest rate environment needs to be closely monitored in the upcoming periods. LIC continues to dominate the market, but private insurers are gaining momentum with stronger growth in individual policies.
