During April-December FY2026, the private insurers reported 14.0% increase in the first-year premium income to Rs 133499.74 crore, and LIC posted 12.3% surge to Rs 177445.79 crore. The overall life insurance first year premium collection moved up 13.0% to Rs 310945.53 crore in April-December FY2026.

Among the 24 private life insurers, only 1 player has recorded drop in new premium collection during December 2025. On the other hand, premium collection of 23 private insurers increased in the range of 7.3% to 304.6% in December 2025.

The life insurers sold 28.78 lakh policies in December 2025, registering a 35.4% increase compared with December 2024. The private players together posted 15.1% surge to 11.06 lakh policies, while the policies sold by LIC increased 52.3% to 17.71 lakh policies.

Life insurers have sold 184.95 lakh policies in April-December FY2026, showing a 1.7% growth against last year. The sales of policies from LIC declined -0.5% to 116.76 lakh policies, while all private players together sold 68.19 lakh policies, recording an increase of 5.7%.

The Gross premium underwritten by non-life insurers (including specialized PSU insurers), rose 13.7% to Rs 28447 crore in December 2025 against December 2024. The premium collection of General Insurers increased 14.8% in premium collection to Rs 23748 crore in December 2025, while that of stand-alone Private Health Insurers galloped 38.8% to Rs 4260 crore in December 2025. Specialised PSU insurers have recorded -65.4% decline in premium collection to Rs 439 crore in December 2025. The non-life insurance sector reported 8.6% surge in the premium collection to Rs 250022 crore in April-December FY2026.

Industry Expectations:

Address issue of decline in insurance penetration: According to Annual Report of IRDAI for 2024-25, insurance penetration in India has declined to 3.7% in 2024-25 from 4% in 2022-23 and 4.2% in 2021-22. This is mainly led by life insurance penetration witnessing drop to 2.7%, while non-life insurance penetration has remain steady at 1%. IRDAI has started a mission for ‘Insurance for all by 2047’. Thus, to address the issue of decline in penetration and increase insurance penetration, the government may announce the specific measures to revive the insurance sector:

Enhanced deduction of Life Insurance Premium: In order to encourage growth in the life insurance segment it is recommended that the Government should increase the limit of deduction for life insurance premium/by creating a separate limit for deductibility of life insurance premium. Increase in tax incentives for insurance products like Term plan, Health etc will result higher demand for insurance products which can be positive for insurance companies.

Capital infusion in public sector insurers: Infusion of capital in public sector general insurance companies would help to improve solvency ratios and provide them with the necessary growth capital.

Increase tax exemption limit for health insurance: An increase in tax exemption limit for health insurance segment would benefit the sector. The waiver of service tax on health insurance premium would be positive for insurance industry. The government may also announce more tax incentives to facilitate people to buy adequate health insurance which has gained significance amid pandemic.

Roadmap on corporate tax rate on life Insurance companies: The government may hike tax rate for insurance companies and provide some details on the timelines of tax rate increase on life insurance companies. It will be overall negative for life insurance businesses operating at lower tax rates. An increase in tax rate from current 14.56% will impact EV and VNB of life insurers.

Roadmap for consolidation of PSU general insurance companies: There could be potential announcement around roadmap of consolidation of PSU general, which will be positive helping to build efficiencies.

Key stocks to watch

ICICI Prudential Life Insurance, HDFC Standard Life Insurance, SBI Life Insurance, New India Assurance, General Insurance Corporation

Outlook

The insurance penetration in India was improving, but it remains substantially lower compared with other leading countries. More importantly it has declined for last three years. The insurance industry has continued to demand separate limit of deduction for life insurance premium. There is a need for providing further impetus to life insurance companies for enhancing the insurance penetration in the country. In the general insurance segment, the announcement on capital allocation and consolidation of public sector general insurers is likely in the budget. The government may also announce more tax incentives to facilitate people to buy adequate health insurance which has gained significance after pandemic.