Insurance industry feels the blues as growth slows amid structural issues

Growth has slowed significantly in FY25 as both life and non-life segment report single digit growth, partly because of changes in reporting norms, as well as lower credit by NBFCs and MFIs

Regulatory disruptions, unfavorable economic conditions, minimal innovation in products and distribution, and unaffordable premiums have collectively led to the insurance industry reporting only single-digit premium growth in the recently concluded financial year (FY25). To make matters worse, the outlook for the current financial year remains equally insipid.

 

The non-life insurance industry recorded a premium growth of just 6.2 per cent in FY25 — its lowest in the past three financial years. This compares to a 13 per cent year-on-year (YoY) growth in FY24 and 16.3 per cent YoY growth in FY23.

 

Similarly, the life insurance segment reported a 5.71 per