India’s life insurance premiums fall 3.1% in June 2025

The decline was mainly due to lower credit life sales.

India’s life insurance industry recorded a 3.1% year-on-year drop in new business premiums in June 2025, collecting $493.41b (Rs.41,117.1 crore).

This marked a reversal from the 12.7% growth in May 2025 and the 14.8% increase seen in June 2024.

The decline was mainly due to lower credit life sales, reduced group single premiums, and the continued impact of revised surrender value rules introduced in October 2024.

The Annual Premium Equivalent (APE) grew 2.5% in June, a slowdown from the 20% growth a year ago.

Over the two-year period ending June 2025, the industry’s APE rose at an 11% compounded annual growth rate. Private insurers led growth with a 15.4% CAGR, significantly higher than Life Insurance Corporation of India’s 4.8%.

Group single premiums in June dropped by 36.4% year-on-year to $312.46b (Rs.26,038.1 crore), pulling down the total volume of policies sold by 14.5%.

Despite this, both LIC and private insurers saw growth in individual single and non-single premium segments.

CareEdge Ratings noted that quarterly growth in Q1 fiscal year 2026 (FY 2026) stood at 4.3%, compared to 22.9% in the same period last year.

The slowdown was attributed to subdued demand and the updated surrender value rules.

The muted performance of unit-linked insurance plans (ULIPs) was linked to market volatility.

However, growth in individual and yearly group business partly offset the decline. Analysts expect insurers to focus more on agency channels amidst banks' deposit mobilisation  push.

Looking ahead, the proposed Insurance Amendment Act is expected to support market expansion by encouraging new entrants.

CareEdge forecasts 10% to 12% annual growth for the life insurance sector over the next three to five years, backed by digitalisation, regulatory support, product innovation, and improved distribution.

($1.00 = Rs.85.82)