The total premium collected by public sector general insurance companies (PSGICs) has increased significantly, rising from around Rs 80,000 crore in FY19 to nearly Rs 1.06 lakh crore in FY25. The overall general insurance industry has also reported growth, with total premium collections reaching Rs 3.07 lakh crore in FY2024-25. This growth was reviewed by Finance Minister Nirmala Sitharaman in a meeting with PSGICs, where she discussed key performance indicators such as premium collections, insurance penetration, and density, and incurred claims ratios.
Despite the growth, general insurance penetration in India remains relatively low, at 1% of GDP, compared to a global average of 4.2% in 2023. Insurance density has, however, improved, increasing from $9 in 2019 to $25 in 2023. The Finance Minister emphasized the need for PSGICs to work towards improving both penetration and density to ensure wider financial protection.
The meeting also discussed the health insurance segment, which has shown consistent premium growth across private insurers, standalone health insurers, and PSGICs. Incurred claims ratios, which had peaked during the Covid-19 pandemic, have since declined. By FY24, these ratios had moderated to 103% for PSGICs, 89% for private insurers, and 65% for standalone health insurers.
The PSGICs have also witnessed a significant turnaround, with all of them becoming profitable again. Oriental Insurance Company Ltd. and National Insurance Company Ltd. started posting quarterly profits, while United India Insurance Company Ltd. posted a profit after a gap of 7 years. New India Assurance Company Ltd. has consistently maintained its position as a market leader and has been making profits regularly.
The Finance Minister emphasized the urgent need for digital transformation across all PSGICs to improve service delivery and efficiency. This includes the adoption of AI-driven claim settlement systems and the use of advanced data analytics and artificial intelligence to develop precise pricing models and efficient claims modeling. The minister believes that this is essential for improved risk assessment and long-term sustainability. Overall, the meeting highlighted the need for continued growth and improvement in the general insurance industry, particularly in terms of penetration, density, and digital transformation.