New labour codes drive faster growth in group life insurance premiums

Group life insurance premiums grew faster than individual policies in FY26 as revised labour codes, including higher basic pay norms & expanded gratuity provisions, boosted corporate-linked insurance

Growth in group life insurance business outpaced growth in individual premiums, hinting at strong traction in corporate-linked insurance policies owing to revisions in the new labour codes.

 

In the April–February period of FY26, group business saw 16.7 per cent year-on-year (Y-o-Y) growth to Rs 2.26 trillion compared with 11 per cent Y-o-Y growth in individual premiums to Rs 1.58 trillion. In February 2026, the premium of group life insurers grew by 17.3 per cent Y-o-Y to Rs 19,656.1 crore while individual premiums rose by 19.1 per cent Y-o-Y to Rs 15,761.2 crore.

 

However, in the year so far, the policies sold under the group segment have dropped 34.46 per cent Y-o-Y to 24,026.

 

“Growth in the group segment was partly supported by revised labour codes that include enhanced gratuity provisions, boosting demand for group insurance products,” analysts at CareEdge said in its report.

 

Under the new codes, basic pay must now constitute at least 50 per cent of an employee’s overall cost to company. Fixed-term employees are now eligible for gratuity after just one year of continuous service, compared with five years previously.