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Key Points

Finance Minister Nirmala Sitharaman noted a significant increase in public sector general insurance premiums, reaching Rs 1.06 lakh crore in FY25. She emphasized that despite the low insurance penetration, there is notable enhancement in insurance density from $9 in 2019 to $25 in 2023. During the meeting with PSGIC officials, the Minister underscored the importance of digital transformation for improving service delivery and leveraging AI for better claim settlements. She also acknowledged the profitability turnaround among all public insurers, emphasizing the need for continued efficiency and advanced tech adoption.

Key Points: Nirmala Sitharaman on Rs 1.06 Lakh Crore Insurance Premium Surge

  • Public insurers' premiums rise significantly to Rs 1.06 lakh crore
  • Nirmala Sitharaman reviews financial performance and advocates digital transformation
  • Insurance penetration remains low, but density sees improvement
  • All PSGICs return to profitability; continued focus on tech and efficiency
3 min read

Public sector general insurance firms collect Rs 1.06 lakh crore premium in FY25

Finance Minister reviews public sector insurers' rising premiums and advocates tech-driven approaches for growth.

"Urgent need for digital transformation across all PSGICs to improve service delivery. - Nirmala Sitharaman"

New Delhi, May 29

The total premium collected by public sector general insurance companies (PSGICs) has witnessed a notable rise from around Rs 80,000 crore in FY19 to nearly Rs 1.06 lakh crore in FY25, the government has said.

The overall general insurance industry also reported growth, with total premium collections reaching Rs 3.07 lakh crore in FY2024–25.

In a meeting with PSGICs here, Finance Minister Nirmala Sitharaman reviewed key performance indicators including premium collections, insurance penetration and density and incurred claims ratios.

The meeting was attended by Secretary, Department of Financial Services (DFS), M. Nagaraju, and the managing directors of New India Assurance, United India Insurance, Oriental Insurance, and National Insurance, General Insurance Corporation of India (Reinsurance), Agriculture Insurance Company of India Limited, along with other senior officials of the Finance Ministry.

While general insurance penetration in India remains relatively low at 1 per cent of GDP — compared to a global average of 4.2 per cent in 2023 — insurance density has steadily improved, increasing from $9 in 2019 to $25 in 2023.

The Finance Minister underscored the need for PSGICs to work towards improving both penetration and density to ensure wider financial protection.

Officials also presented a five-year analysis of the health insurance segment, showing consistent premium growth across Private Insurers, Standalone Health Insurers (SAHI), and PSGICs. Incurred claims ratios, which had peaked during the Covid-19 pandemic in FY21 (PSGICs at 126 per cent and private insurers at 105 per cent), have since declined.

By FY24, these ratios had moderated to 103 per cent for PSGICs, 89 per cent for private insurers, and 65 per cent for SAHI.

The PSGICs have witnessed a significant turnaround with all of them having become profitable again.

While Oriental Insurance Company Ltd. (OICL) and National Insurance Company Ltd. (NICL) started posting quarterly profits from Q4 of FY 2023-24 and Q2 of FY 2024-25, respectively, United India Insurance Company Ltd. (UIICL) posted profit in Q3 of FY 2024-25 after a gap of 7 years.

Notably, New India Assurance Company Ltd. (NIACL) has consistently maintained its position as a market leader and has been making profits regularly.

Finance Minister emphasised the urgent need for digital transformation across all PSGICs to improve service delivery and efficiency. This includes the adoption of AI-driven claim settlement systems, particularly for Motor Own Damage and Health insurance products, to ensure faster and more accurate claim resolution.

The minister also emphasised the importance of leveraging advanced data analytics and artificial intelligence to develop precise pricing models and efficient claims modelling, which are essential for improved risk assessment and long-term sustainability.

—IANS

- IANS

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Reader Comments

R
Rahul K.
This is great news! Public sector insurance companies making profits shows our economy is strengthening. But 1% insurance penetration is still too low - we need more awareness campaigns in rural areas. Digital transformation is the way forward 👍
P
Priya M.
While the numbers look impressive, I hope this profitability translates to better services for customers. Last year my health claim with a PSGIC took 3 months to process! AI-driven systems should help, but implementation needs to be careful.
A
Arjun S.
Good to see United India Insurance back in profit after 7 years! These companies employ thousands of Indians and their stability matters. The digital push is overdue though - private insurers are way ahead in tech adoption.
S
Sunita R.
₹1.06 lakh crore is a big number! But we must remember insurance is not just about premiums - it's about protection. Hope PSGICs will focus more on affordable products for middle class and farmers. The agriculture insurance numbers weren't highlighted enough here.
V
Vikram J.
The claims ratio improvement post-Covid is remarkable. Shows our insurance sector is maturing. But comparing $25 density to global $700+ shows how much potential remains. Maybe tie-up with fintech startups could accelerate growth?
N
Neha P.
As someone who works in insurance, I'm happy but not surprised. The sector reforms and government push for insurance-for-all are working. Though private players still dominate health insurance, PSGICs are catching up. More transparency in claim settlements would build further trust.

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