The committee formed under the Life Insurance Council to review the commission structure in the life insurance sector has recommended capping distributor commissions or deferring them to ease acquisition costs. The recommendations will be sent to the insurance regulator -- Insurance Regulatory and Development Authority of India (Irdai).
The life insurance industry recorded nearly 40 per cent year-on-year (Y-o-Y) growth in new business premiums (NBP), aided by the rationalisation of goods and services tax (GST) on individual life insurance premiums, which has made policies more affordable for consumers.
The loss of input tax credit (ITC) following the rationalisation of the goods and services tax (GST) on individual life and health insurance from 18 per cent to nil is may weigh on the profits of life insurers in the third quarter (Q3) of 2025-26 (FY26).
The reduction in goods & services tax (GST) on individual life and health insurance premiums has been called a "landmark step" for making insurance affordable and inclusive. In a panel discussion at the Business Standard BFSI Insight Summit 2025, Anup Bagchi, managing director (MD) & chief executive officer (CEO) of ICICI Prudential Life Insurance; Mahesh Balasubramanian, MD & CEO of Kotak Life Insurance; Tarun Chugh, MD & CEO of Bajaj Life Insurance; and Ratnakar Patnaik, MD of Life Insurance Corporation of India (LIC), listed what else the industry needs to reach more people.
New business premiums of life insurance companies dropped 5.2 per cent year-on-year (YoY) in August to Rs 30,959 crore, owing to a double-digit decline reported by state-owned Life Insurance Corporation (LIC), data from the Life Insurance Council showed. LIC recorded a 17 per cent YoY fall in new business premiums to Rs 16,023 crore during the month, while private life insurers reported a 12 per cent YoY increase to Rs 14,936 crore.
Canadian firm Manulife and Mahindra & Mahindra (M&M), an Indian automaker with interests in financial services, have signed an agreement to form a 50:50 life insurance joint venture (JV) with a total capital commitment of up to Rs 3,600 crore each totalling Rs 7,200 crore.
Some of the leading life insurance companies have reported a sharp decline in the number of lives covered in FY25, largely due to a slowdown in credit-linked life insurance policies. Stress in the microfinance segment has reduced loan disbursements and, in turn, the flow of new customers to insurers.
Both the life and non-life insurance segment posted over 20 per cent premium growth in November for the first time in this financial year (FY26), supported by the reduction in goods and services tax (GST) on premiums from 18 per cent to zero and a favourable base effect.
Finance Minister Nirmala Sitharaman on Tuesday said that raising the FDI limit to 100 per cent in the insurance sector will help attract more capital, improve competition and increase insurance penetration by making policies more affordable.
Life insurers shifted their focus to selling high-value policies in October as the transition to new surrender value norms, effective October 1, limited their ability to roll out all products in their portfolio. This led to a 40 per cent year-on-year (Y-o-Y) drop in the number of policies sold in October. Additionally, distributors engaged in a fire sale of policies in September due to uncertainty about the impact of the new norms on their commission structures.
The government has circulated among members ofParliament a new draft of the Amendment of Insurance laws Bill, 2025, proposing stricter safeguards on the utilisation of life insurance funds and other specified insurance business funds, particularly for dividend payouts, bonuses, and servicing of debentures.
Life insurance companies reported a 13.16 per cent year-on-year (Y-o-Y) growth in new business premium (NBP), totting up Rs 30,347 crore in October, even as the number of policies sold saw a sharp decline. The growth was largely driven by strong performance from private sector life insurers.
The exemption of individual life and health insurance premiums from the Goods and Services Tax (GST) enables the insurance industry to make products affordable and attractive, said Ajay Seth, chairman of Insurance Regulatory and Development Authority of India (Irdai) at the Business Standard BFSI Insight Summit 2025.
The Union Cabinet on Friday approved 100 per cent foreign direct investment (FDI) in the insurance sector, a move that was welcomed by industry as it would help attract more capital and global expertise, while boosting insurance coverage in the country. A bill to amend the insurance law is likely to be tabled on Monday in Parliament, whose winter session is slated to conclude on December 19.
Following the notification allowing 100 per cent foreign direct investment (FDI) in the insurance sector, the Finance Ministry has revised norms to remove the requirement that a majority of directors and key management personnel in an insurance company with foreign investment be Indian residents.
The All India Insurance Employees' Association has opposed the government directive seeking to open up top posts in the state-owned insurers to the private sector, saying this would lead to greater private influence and "eventual privatisation".
The life insurance industry reported a 25.28 per cent decline in new business premium income in November 2023 to Rs 26,494.83 crore from Rs 34,588.8 crore recorded a year ago. The fall in group premium and change in taxation norms for policies with a higher ticket size dragged the premiums of the state-run Life Insurance Corporation of India (LIC) and private insurers, respectively. According to the data released by the Life Insurance Council, the premium of private insurers slipped 9.33 per cent Y-o-Y to Rs 10,360.29 crore from Rs 11,426.73 crore as a result of a change in product mix due to the measures taken to counter the impact of tax imposed on the premiums of Rs 5 lakh.
All the four listed private life insurance companies recorded a drop in value of new business (VNB) margin in the financial year 2023-24 (FY24) as compared to FY23. This is because of a higher share of unit-linked insurance plans (Ulips) in the product mix. VNB is a measure of the economic value of profits expected to emerge from a new business.
Use these loans to meet emergency needs, and not to fund holidays or luxury purchases.
'The government is putting insurance in the same category as food, which is essential for life.' 'Now this is an opportunity for the sector to focus on the consumer.'
FM's decision to make PAN card a neccessity for financial transactions has worried life insurers, who will find it difficult to tap rural India with this requirement.
The government on Friday received financial bids for the strategic disinvestment of IDBI Bank, the Department of Investment and Public Asset Management (Dipam) said in an official statement on X.
A nationwide strike called by central trade unions saw a mixed response across India, impacting various sectors and states differently, with some areas experiencing disruptions while others remained largely unaffected.
The data for individual weighted received premium (WRP) showed divergent trends for life insurers in December 2024. Overall, the industry's individual WRP grew 4.8 per cent year-on-year (Y-o-Y); LIC's individual WRP declined 13 per cent while private players saw 11.4 per cent growth.
Finance Minister Nirmala Sitharaman on Thursday said the country needs big and world-class banks, and discussions are on with the Reserve Bank and lenders in this regard.
The overall physical presence of life insurance companies in Tier-II and Tier-III cities increased in FY23 compared to a year ago period on account of the higher impetus given to financial inclusion by the government and insurance regulator, as well as recovery from the Covid-19 pandemic, according to the latest data released by the Insurance Regulatory and Development Authority of India (Irdai). It is the first time that there has been growth in the number of offices since the financial year 2019-20.
Life insurance industry grew by over 65 per cent to Rs 5,436 crore in September compared to Rs 3,291 crore premium income from new business in July, mainly due to the success of LIC's Varishtha Pension Bima Yojana.
'As our per capita income increases and various demographic segments emerge, the need for various kinds of protection and risk covers will become even more explicit.'
The life insurance industry posted 48 per cent growth in July with the Life Insurance Corporation and 12 private insurers mopping up Rs 3,291 crore in premium income, selling about 49 lakh policies during the month.
Life insurance companies have yet to see the entry of the younger generation in a big way. This was highlighted by N S Kannan, executive director, ICICI Prudential Life Insurance, while launching an insurance product for cancer.
The Life Insurance Corporation of India has the wherewithal to acquire a composite license, a top source aware of the development told Business Standard, adding that the insurance behemoth may look into entering the health and general insurance segments. "LIC has the scale, capacity, IT infrastructure, and the distribution reach to take advantage of the composite license. "LIC is looking at organic as well as inorganic growth opportunities.
'LIC's investment decisions are taken independently, following strict due diligence, risk assessment and fiduciary compliance.'
State-backed Life Insurance Corporation of India (LIC) recorded strong growth in the value of new business (VNB) margin in the third quarter of financial year 2023-24 (Q3FY24) while major listed private life insurers reported a weak performance. VNB refers to the profit that an insurer is likely to garner from new business, which comes from policies sold in a particular period. VNB margin is the profit margin of the insurer.
In order for life insurance customers to attain maximum benefits, it is crucial for the persistency ratio to be far higher than its current level, top executives of the industry said at the Business Standard BFSI Insight Summit on Thursday. The persistency ratio is a metric that measures the number of policyholders who continue paying renewal premium and is gauged at varying stages in the life of a policy. A higher persistency ratio is seen as an indicator of an insurance product that caters satisfactorily to the needs of a customer.
Data released by the Life Insurance Council reveals that the total pension premium for the life insurance industry saw a growth of 159 per cent at Rs 22,268 crore (Rs 222.68 billion) for FY07 compared with Rs 8,568 crore (Rs 85.68 billion) in FY06.
Players seek separate deduction for long term savings, or alternatively hike in exemption limit U/s 80 C; also seek longer period of carry forward of losses under Income Tax Act and also to increase FDI limit from 26% to 49%
Finance Minister Nirmala Sitharaman on Tuesday allayed apprehension that privatisation of state-owned banks would hurt financial inclusion and national interest. She said the bank nationalisation done in 1969 has not yielded the desired result as far as financial inclusion was concerned.
Life insurance sector in India grew by 41 per cent in 2005-06 due to better performance of country's largest life insurer, LIC, and private players like Bajaj Allianz and ICICI Prudential.
Led by state-owned LIC, new business for the life insurance industry recorded a growth of 25 per cent during 2009-10, overcoming the decline witnessed a year ago on account of the global financial meltdown.
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