Amid regulatory changes in the financial year 2024-25 (FY25), new business premiums (NBPs) of life insurers grew by 5.13% year-on-year (YoY) to Rs 3.97 trillion, compares to a 2% growth in the previous fiscal of Rs 3.77 trillion, according to data from the Life Insurance Council.

State-owned Life Insurance Corporation of India (LIC)'s NBP grew by 1.86% year-on-year to Rs 2.27 trillion.

Premiums of private sector life insurance companies grew by 9.8% to Rs 1.71 trillion in FY25.

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

Saurabh Bhalerao, Head of Banking, Financial Services and Insurance (BFSI) Research, CareEdge Ratings, said “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.”

The individual NBP collected In FY25, grew 11.3% Y-o-Y to Rs 1.67 trillion compared to Rs 1.5 trillion last year.

Premiums of SBI Life Insurance, the largest private life insurer, fell 7 percent to Rs 35,576.67 crore. Other major players, HDFC Life Insurance, grew 12.58 percent to Rs 33,761.94 crore, while ICICI Prudential Life Insurance premiums rose 24.9 percent to Rs 22,583.49 crore.

Axis Max Life Insurance's premium growth increased by 10.5 percent to Rs 12,173.41 crore, while Bajaj Allianz Life Insurance's premium growth increased by 6.7 percent to Rs 12,292.58 crore.

As of FY25, LIC's market share was 57% and private life insurance companies had nearly 43%. In March FY25, overall premiums grew by 2% year-on-year to Rs 61,439.11 crore. LIC's premiums grew by 1.67% to Rs 36,907.33 crore, while private insurance companies' premiums grew by 2.58% to Rs 24,531.8 crore.