Public-sector banks' bancassurance growth slows amid core banking push

FM, ex-Irdai chairman had raised concerns over misselling

Amid growing concerns about misselling through the bancassurance (banca) channel, public-sector banks (PSBs) have scaled back their insurance sales efforts, leading to a slowdown in growth through banca for life insurance companies in 2024-25 (FY25). 

 

In contrast, life insurance companies affiliated with private-sector banks have nearly doubled their growth through the banca channel in the same period.

 

According to industry estimates, growth in the banca channel of life insurers backed by PSBs slowed from 7 per cent in FY24 to 6 per cent in FY25, with growth in March slowing to just 2 per cent.

 

Banca channel growth for life