Banca channel for PSB-led life insurers slows in FY25 as incentives dry up

A renewed focus on core business, discontinuation of incentives for employees, and customer movement to digital purchases of insurance are the key reasons for the decline

Growth in the bancassurance channel for life insurance companies backed by state-owned banks has slowed in FY25 compared to last year, due to a change in incentives offered by some of the lenders as these banks are now renewing focus on their core business.

 

According to industry estimates, growth in the bancassurance channel of life insurers backed by public sector banks (PSBs) slowed to 6 per cent in FY25, with growth in March slowing to just 2 per cent. In FY24, the growth rate was 7 per cent.

 

Similarly, growth in the bancassurance channel of private banks-led life insurers was