India’s life insurance sector reported a 12.7% year-on-year growth in May, with total premiums reaching Rs30,463.2 crore. This growth rate was higher than April’s 8.4% increase but lower than the 15.1% expansion recorded in May 2024. The slower growth is attributed to the impact of revised surrender value regulations implemented in October 2024.
Despite the overall growth, the number of life insurance policies sold declined by 10.4% during the month. Individual non-single policies fell by 10.5% to 16.7 lakh. However, private insurers saw growth in individual non-single premiums, while the Life Insurance Corporation (LIC) recorded a 7.8% decline in this segment. Private players’ performance was supported by a shift towards higher-value policies.
Key Growth Metrics
- Annual Premium Equivalent (APE) rose by 14.4% in May, compared to 12.0% in May 2024.
- Between May 2023 and May 2025, the industry’s APE grew at a 13.2% compound annual growth rate (CAGR), with private insurers growing at 13.8%, ahead of LIC’s 12.4%.
Market Performance and Future Outlook
Growth in Unit Linked Insurance Plans (ULIPs) remained subdued due to market volatility, while group business was the main driver of May’s performance. Industry analysts expect insurers to increase their focus on the agency channel as banks prioritize deposit mobilization. Regulatory developments, including the proposed Insurance Amendment Act and initiatives such as Bima Trinity, are expected to support market expansion.
