India's life insurance sector grows 20% YoY in November

The sector's two-year compound annual growth rate (CAGR) stood at 1.8%.

The life insurance sector in India posted a robust 19.9% year-on-year (YoY) growth in Annual Premium Equivalent (APE) in November, significantly higher than the 10.6% growth recorded in October 2024, data from the Life Insurance Council showed.

This growth was primarily driven by private insurers, buoyed by strong performance in the individual non-single premium segment.  

The sector's two-year compound annual growth rate (CAGR) stood at 1.8% from November 2022 to November 2024, with private insurers achieving 18.0% growth whilst LIC experienced a contraction of 22.8%.

The industry faced headwinds from revised surrender value norms effective October 1, 2024, as well as changes in policy structure affecting sum assured and commissions.  

CareEdge analysts highlighted the impact of regulatory changes, including the new surrender value norms and product structure revisions, which have introduced volatility in premium movements. 

Sanjay Agarwal, senior director at CareEdge Ratings, noted that the agency channel is likely to gain emphasis as insurers seek to diversify beyond bancassurance, influenced by banks' focus on deposit gathering.  

Further, the proposed Insurance Amendment Act, 2024, which includes provisions for composite licenses, 100% FDI in insurance companies, and revised capital requirements, is expected to improve market penetration and encourage new entrants.  

CareEdge projects the life insurance industry to grow at 11% to 13% annually over the next three to five years, driven by a combination of regulatory reforms, distribution channel diversification, and product innovation.