The Indian life insurance sector has reported a 5.71% rise in new business premiums (NBPs) on a year-to-date (YTD) basis as of February, according to data from the Life Insurance Council.
The increase comes amid policy reforms, including a higher foreign direct investment (FDI) cap and ongoing regulatory changes that are expected to drive further expansion in the broader Indian insurance industry.
NBPs for February 2025 amounted to ₹29,985.58 crore, contributing to a rise in cumulative collections for the financial year from ₹3,17,746.71 crore to ₹3,35,897.67 crore. Insurers issued 1,941,272 new policies during the month, signalling steady policy adoption.
The data further showed that individual single premiums grew by 8.30% year-over-year to ₹4,300.94 crore, while individual non-single premiums reached ₹8,933.99 crore, reflecting a 12% increase from the previous year.
Group insurance premiums for February stood at ₹15,130.54 crore, with policy issuances in this category also seeing an uptick.
Industry participants have attributed this expansion to increased awareness of life insurance, a growing distribution network, and digital transformation.
The Indian government’s move to allow full foreign ownership in insurance companies is also expected to strengthen capital inflows, enhance product innovation, and expand coverage across new customer segments.
As part of the Union Budget 2025-26, the government announced an increase in the FDI limit in the insurance sector from 74% to 100%, provided that the invested premium remains within India. The policy change is aimed at attracting foreign investments and fostering competition within the industry.
Finance Minister Nirmala Sitharaman, during her budget speech, noted that the increased investment limit will apply to insurers that retain all invested premiums within India. Additionally, the regulatory conditions for foreign participation will be reviewed and streamlined.
In parallel with the FDI policy changes, the Insurance Regulatory and Development Authority of India (IRDAI) has constituted a seven-member committee to review and propose amendments to the Insurance Act, 1938.
The initiative aims to modernise the industry’s legal framework, ensuring it aligns with evolving market needs and investment trends.
The committee, led by former State Bank of India chairman Dinesh Khara, will examine existing regulations and suggest modifications that could impact compliance requirements, licensing rules, and distribution models. These reforms are expected to facilitate smoother foreign investment processes while also strengthening consumer protections.
