India’s life insurance sector has delivered a mixed performance in July 2025. While new business premiums (NBP) showed healthy growth for both LIC and private insurers, the number of policies issued continues to lag behind last year’s tally. This trend underscores a growing reliance on high-value policies rather than expanding the customer base.
| Month | NBP Growth | Policy Count Change |
|---|---|---|
| May 2025 | +13% (₹30,463 Cr) | –10.4% |
| June 2025 | –3.1% (₹41,117 Cr) | LIC –10.2% / Pvt +7.2% |
| July 2025 | +22.4% (₹38,958 Cr) | –4.6% overall |
In July, the life insurance industry recorded ₹38,958 crore in new business premiums, up 22.4% year-on-year. Both LIC and private insurers contributed to the surge, growing 22.7% and 22.0% respectively. However, the number of policies sold fell by 4.6%, with LIC seeing a sharper drop of 10.2%, while private insurers managed a 7.2% increase.
Industry observers point out that premium growth is being driven by high-ticket products, such as single-premium and group policies, rather than an expansion in customer acquisition. This aligns with earlier months’ data — in May, NBPs grew 13% but policy counts dipped by over 10%, and in June, premiums fell 3.1% while volumes remained weak.
This trend shows that after new surrender value rules, insurers are focusing on selling higher-value policies that give better profits. Private insurers are pushing new products and targeting cities, while LIC still depends on its big agent network but struggles with selling more low-cost policies.
Why It Matters:
- Premium vs Volume Gap: Premiums are growing, but fewer policies are being sold, which could reduce future renewals.
- Competitive Shifts: Private insurers are growing both premiums and policy numbers, putting more pressure on LIC.
- Consumer Impact: Customers may see more sales push for expensive plans, while cheaper options for lower-income groups may get less attention.
India’s life insurers are focusing more on high-value premiums than on selling more policies. The key challenge now is to balance profits with wider insurance reach.
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