Life insurers’ first-year premiums increased by 2% in March and 5.1% in the fiscal year 2025.
The life insurance industry in India has reported a 2% year-on-year increase in first-year premiums for the month of March, with total collections reaching ₹61,439 crore. This growth is a welcome relief after a weak February, which saw a 12% year-on-year decline in premiums. For the entire financial year 2024-25 (FY25), first-year premiums have increased by 5.1% year-on-year.
Among private insurers, ICICI Prudential Life Insurance has reported an impressive 18% rise in March premiums, with its total annualized premium equivalent (APE) increasing by 32% year-on-year. HDFC Life has also reported a 5% growth in March premiums, with a 6% increase in total APE. Axis Max Life has seen a 1% rise in March premiums, with an 11% jump in total APE.
However, not all insurers have reported positive growth. SBI Life has reported an 11% decline in March premiums, although its total APE has risen by 2% year-on-year. LIC, the largest life insurer in India, has reported a 2% increase in March premiums, but its total APE has declined by 4%.
In February, private insurers had reported a 3% rise in premiums, with their 11-month FY25 premium collections growing by 11% year-on-year. Total APE had risen by 8%, while retail APE had increased by 2% during the same period. HDFC Life had reported a 24% year-on-year growth in February premiums, while ICICI Prudential had seen a 5% rise.
The growth in the life insurance industry is a positive sign, indicating that consumers are increasingly seeking protection and savings products. The industry is expected to continue growing, driven by increasing awareness and demand for life insurance products. However, the decline in premiums reported by some insurers, such as SBI Life, is a cause for concern and may be due to various factors, including intense competition and regulatory changes. Overall, the life insurance industry in India is expected to remain competitive and dynamic, with insurers focusing on innovation, customer engagement, and product development to drive growth.
Prudential plc and HCL Group are collaborating on a new health insurance joint venture.
UK-based Prudential Plc has announced a plan to establish a health insurance joint venture with India’s HCL Group. The new business will have Prudential Group Holdings Limited, a UK subsidiary, holding a 70% stake, while Vama, an HCL Group company, will hold the remaining 30%. This move is part of Prudential’s expansion in the Indian insurance market, which it has been a part of since the establishment of ICICI Prudential Life Insurance in 2001.
This development comes as other players in the Indian insurance sector are making significant moves. Public sector behemoth Life Insurance Corporation of India (LIC) is in the final stages of acquiring a substantial stake in a pure health insurance company and is expected to make an announcement before March 31. There are currently seven standalone health insurance companies operating in India, including Star Health & Allied Insurance, Niva Bupa Health Insurance, and ManipalCigna Health Insurance, among others.
In another significant development, German financial services firm Allianz SE has reportedly reached a preliminary agreement with Jio Financial Services Ltd, a joint venture between Jio Platforms and a clutch of investors, to establish a joint venture covering both health and general insurance businesses. This move comes days after Bajaj Finserv and Allianz SE announced the end of their joint venture, Bajaj Allianz, in a deal worth Rs 24,180 crore. Additionally, Patanjali Ayurved has entered the insurance sector through its acquisition of Magma General Insurance from Adar Poonawalla for Rs 4,500 crore.
ICICI Prudential introduces GIFT Select, a new plan offering a guaranteed income feature.
ICICI Prudential Life Insurance has launched a new long-term savings product called ‘ICICI Pru GIFT Select’, which offers guaranteed income along with a lump sum maturity benefit. This product is designed to provide financial stability in the face of market volatility. Customers can choose when their guaranteed income starts, its duration, and the final maturity amount, as well as opt for life cover for added financial security.
One of the key features of this plan is the increasing income option, which grows at a compound rate of 5% annually, helping to manage the impact of inflation over time. The product is designed to help customers preserve their wealth and manage their cash flow efficiently, with flexible payout structures that cater to different financial goals, such as retirement planning, education, or regular income needs.
ICICI Prudential has noted that the demand for guaranteed return products has risen in recent times, as investors prioritize predictable returns in uncertain economic conditions. The company’s claim settlement ratio stood at 99.3% in the first nine months of FY2025, with an average settlement time of just 1.2 days for non-investigated claims. With ICICI Pru GIFT Select, customers can enjoy a combination of guaranteed returns and life insurance, providing peace of mind and financial security.
According to recent data, the total new business premiums collected by life insurers decreased by 12% in February, with LIC at the forefront of this trend.
New business premiums of life insurance companies in India continued to decline in February, marking the fourth consecutive month of decline since the new surrender value guidelines came into effect in October 2024. The data from the Life Insurance Council showed that new business premium (NBP) stood at Rs 29,985.58 crore, a 12% year-on-year decline from Rs 33,913.18 crore in the same period last year. The decline was led by Life Insurance Corporation of India (LIC), the country’s largest life insurer, which saw its monthly premium decline 22% to Rs 15,513.95 crore.
LIC’s CEO, Siddhartha Mohanty, acknowledged that the new surrender value norms had impacted premium collections, and while collections were expected to improve in the fourth quarter, the decline worsened in February with a 14% year-on-year decline in January. To mitigate the impact, life insurers have been adopting measures such as reducing first-year commissions on new policies and clawing back agent commissions if policies are surrendered within the first two years.
In contrast, private life insurance companies witnessed a modest 3% year-on-year growth in NBP to Rs 14,471.62 crore. HDFC Life Insurance saw a 24% rise in NBP to Rs 3,213.76 crore, while SBI Life Insurance recorded an 18% decline to Rs 2,174.53 crore. ICICI Prudential Life Insurance grew 5% to Rs 1,857.05 crore, and Bajaj Allianz Life Insurance reported a 3% increase to Rs 1,080.33 crore. The industry sold 1.9 million policies during the month, down from 2.2 million in the same period last year.