Public Sector General Insurers Collect ₹1.06 Lakh Crore Premium in FY25

Public sector general insurance companies (PSGICs) have recorded a significant milestone by collecting approximately ₹1.06 lakh crore in premiums during FY2024–25, up from ₹80,000 crore in FY2018–19. This development reflects the robust recovery and growth of the general insurance sector, which also saw the Finance Minister Nirmala Sitharaman reviewing key performance metrics such as insurance penetration, premium density, and incurred claims ratios in a high-level meeting with the heads of these firms.

Why in News?

The Finance Minister recently held a performance review meeting with public sector general insurers to assess the sector’s health, growth potential, and challenges. The meeting came amid significant growth in premium collections and profitability revival across PSGICs, along with a push for digital transformation and enhanced risk management through AI and data analytics.

Key Highlights

• Premium Collection (FY25): ₹1.06 lakh crore by PSGICs, compared to ₹80,000 crore in FY19.
• Total General Insurance Premium (Industry-wide): ₹3.07 lakh crore in FY25.
• Insurance Penetration (India): Still low at 1% of GDP vs 4.2% global average (2023).
• Insurance Density: Improved from $9 in 2019 to $25 in 2023.

Meeting Overview

• Chaired by Finance Minister Nirmala Sitharaman.

Attended by,

• Secretary, DFS M. Nagaraju
• MDs of New India Assurance, United India Insurance, Oriental Insurance, National Insurance
• Representatives from GIC Re and Agriculture Insurance Co.
• Senior officials from the Ministry of Finance

Performance Metrics Reviewed

• Premium Collections
• Insurance Penetration and Density
• Incurred Claims Ratios
• Profitability Trends

Turnaround in Profitability

All PSGICs are profitable again,

• OICL posted profit from Q4 FY24.
• NICL returned to profit in Q2 FY25.
• UIICL recorded profit in Q3 FY25 after 7 years.
• NIACL remains the market leader, consistently profitable.

Health Insurance Sector Overview

Post-COVID, incurred claims ratios have normalized,

• FY21 (COVID peak): PSGICs – 126%, Private Insurers – 105%
• FY24: PSGICs – 103%, Private – 89%, SAHI – 65%
• Consistent premium growth across all health insurance segments.

Digital Transformation Push

• Emphasis on AI-driven claim settlement systems (esp. Motor & Health insurance)

Use of data analytics & AI for,

• Accurate pricing models
• Efficient claims modeling
• Enhanced risk assessment
• Long-term sustainability