Have Public Sector General Insurance Firms Collected Rs 1.06 Lakh Crore Premium in FY25?
Click to start listening
Synopsis
The growth of public sector general insurance firms in India is remarkable, with premiums rising to Rs 1.06 lakh crore in FY25. This article explores the factors driving this impressive increase and the future of insurance in India, revealing key insights from government officials and industry leaders.
Key Takeaways
- PSGICs have increased premium collections significantly.
- The total general insurance market reached Rs 3.07 lakh crore.
- Insurance penetration in India stands at 1 percent of GDP.
- Digital transformation is essential for improving service delivery.
- Health insurance premiums have shown consistent growth post-pandemic.
New Delhi, May 29 (NationPress) The total premium amassed by public sector general insurance companies (PSGICs) has shown a significant increase from approximately Rs 80,000 crore in FY19 to nearly Rs 1.06 lakh crore in FY25, according to government reports.
The entire general insurance sector also experienced growth, with total premium collections soaring to Rs 3.07 lakh crore in FY2024–25.
During a meeting with PSGICs, Finance Minister Nirmala Sitharaman assessed key performance indicators such as premium collections, insurance penetration, density, and incurred claims ratios.
Present at the meeting were M. Nagaraju, Secretary of the Department of Financial Services (DFS), and the managing directors of notable companies including New India Assurance, United India Insurance, Oriental Insurance, and National Insurance, along with senior officials from the Finance Ministry.
Despite the general insurance penetration in India being relatively low at 1 percent of GDP — significantly lower than the global average of 4.2 percent in 2023 — insurance density has shown steady improvement, rising from $9 in 2019 to $25 in 2023.
The Finance Minister emphasized the necessity for PSGICs to enhance both penetration and density to provide broader financial protection.
Officials also shared a five-year analysis of the health insurance sector, indicating consistent premium growth among Private Insurers, Standalone Health Insurers (SAHI), and PSGICs. The incurred claims ratios, which peaked during the Covid-19 pandemic in FY21 (with PSGICs at 126 percent and private insurers at 105 percent), have since seen a decline.
By FY24, these ratios moderated to 103 percent for PSGICs, 89 percent for private insurers, and 65 percent for SAHI.
The PSGICs have experienced a remarkable turnaround, with all of them returning to profitability.
While Oriental Insurance Company Ltd. (OICL) and National Insurance Company Ltd. (NICL) began reporting quarterly profits from Q4 of FY 2023-24 and Q2 of FY 2024-25, respectively, United India Insurance Company Ltd. (UIICL) achieved profitability in Q3 of FY 2024-25 after a seven-year hiatus.
Importantly, New India Assurance Company Ltd. (NIACL) has consistently upheld its status as a market leader, regularly posting profits.
The Finance Minister underscored the pressing need for digital transformation within all PSGICs to enhance service delivery and efficiency. This transformation includes adopting AI-driven claim settlement systems, especially for Motor Own Damage and Health insurance products, to facilitate quicker and more precise claim resolutions.
Furthermore, the minister highlighted the significance of utilizing advanced data analytics and artificial intelligence to create accurate pricing models and effective claims modeling, both essential for improved risk assessment and long-term sustainability.
Point of View
I see the rising trend in public sector general insurance as a positive sign for economic resilience. The growth in premiums reflects a growing awareness and acceptance of insurance in India. However, challenges remain in improving penetration and density. The emphasis on digital transformation is timely and necessary for the industry's future.
NationPress
22/09/2025
Frequently Asked Questions
What is the total premium collected by PSGICs in FY25?
Public sector general insurance companies collected approximately Rs 1.06 lakh crore in premiums during FY25.
How has the insurance penetration in India changed?
Insurance penetration in India remains low at 1 percent of GDP, but it has shown signs of improvement.
What are the key performance indicators reviewed by the Finance Minister?
The Finance Minister reviewed premium collections, insurance penetration, density, and incurred claims ratios during the meeting.
What technologies are PSGICs adopting for better service delivery?
PSGICs are adopting AI-driven claim settlement systems to improve service delivery and efficiency.
What are the trends observed in the health insurance segment?
The health insurance segment has shown consistent premium growth, with a notable decline in incurred claims ratios post-Covid-19 pandemic.
