Life insurers' NBP grows 5% in FY25; premium collected shy of Rs 4 trn mark

The premiums of the largest private life insurer - SBI Life Insurance - slipped by 7 per cent Y-o-Y to Rs 35,576.67 crore

Amid regulatory changes during the financial year 2024-25 (FY25), new business premiums (NBPs) of life insurers grew 5.13 per cent year-on-year (Y-o-Y) to ₹3.97 trillion.

 

This compares to a 2 per cent growth at ₹3.77 trillion in the previous financial year, according to data by Life Insurance Council.

 

The NBP of state-owned Life Insurance Corporation of India (LIC) grew 1.86 per cent Y-o-Y to ₹2.27 trillion.

 

The premiums of private sector life insurance companies expanded 9.8 per cent to ₹1.71 trillion in FY25.

 

The Insurance Regulatory & Development Authority of India (Irdai) revised the surrender value norms, which were effective from October 1, 2024. Here, life insurance companies have to pay higher special surrender value (SSV) to policyholders on completion of the first policy year if they have paid the full year premium for a year. Earlier, the insurers did not have to pay customers who surrendered their policies at the end of the first year. 

 

“Post regulatory changes, growth has slowed across most product categories in the second half of the financial year. Also, in case of group single premiums, the growth has been broadly flat amid the current interest rate environment. This makes it less attractive compared to other investment options. Also, there have been changes in the taxation norms introduced in the Union Budget. This is also weighing on the growth in premiums,” said Saurabh Bhalerao, head of banking, financial service and insurance (BFSI) Research, CareEdge Ratings.

 

In FY25, the individual NBP collected grew 11.3 per cent Y-o-Y to ₹1.67 trillion compared to ₹1.5 trillion last year. Meanwhile, group business premium saw an uptick of 1.07 per cent to ₹1.64 trillion. 

 

Premiums of the largest private life insurer — SBI Life Insurance — slipped 7 per cent to ₹35,576.67 crore.

 

Other top names — HDFC Life Insurance posted 12.58 per cent growth to ₹33,761.94 crore and ICICI Prudential’s premium rose by 24.9 per cent to ₹22,583.49 crore.

 

Axis Max Life Insurance’s premium growth stood at 10.5 per cent to ₹12,173.41 crore and Bajaj Allianz Life Insurance recorded 6.7 per cent rise at ₹12,292.58 crore.

 

As of FY25, the market share of LIC was 57 per cent and private life insurers accounted for nearly 43 per cent.

 

In March FY25, the overall premium inched up by 2 per cent Y-o-Y to ₹61,439.11 crore.

 

LIC posted 1.67 per cent growth to ₹36,907.33 crore while private insurers’ premium inched up by 2.58 per cent to ₹24,531.8 crore.