The Indian government has reported a significant increase in the total premium collected by public sector general insurance companies (PSGICs) over the past few years. The total premium collected by PSGICs has risen from around Rs 80,000 crore in FY19 to nearly Rs 1.06 lakh crore in FY25. The overall general insurance industry has also experienced growth, with total premium collections reaching Rs 3.07 lakh crore in FY2024-25.
Finance Minister Nirmala Sitharaman recently reviewed the performance of PSGICs, including premium collections, insurance penetration, and density, and incurred claims ratios. The meeting was attended by senior officials from the Finance Ministry and the managing directors of various PSGICs. While general insurance penetration in India remains relatively low at 1% of GDP, insurance density has improved, increasing from $9 in 2019 to $25 in 2023.
The Finance Minister emphasized the need for PSGICs to improve both penetration and density to ensure wider financial protection. Officials presented a five-year analysis of the health insurance segment, showing consistent premium growth across private insurers, standalone health insurers, and PSGICs. The incurred claims ratios, which had peaked during the Covid-19 pandemic, have since declined.
The PSGICs have 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 leveraging 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 PSGICs are on a path of growth and improvement, and the government is pushing for further digitalization and innovation to enhance their performance.