PSU Non-Life Insurers Lead Premium Mobilisation Ahead of Private Players in June Quarter

In the first quarter ending June 2025, public sector general insurance companies outshone their private sector counterparts by recording a 14.6% rise in gross premiums underwritten, significantly surpassing the industry average growth of 8.84%. Despite a broader slowdown in health insurance premium growth, public sector insurers also succeeded in expanding their market share. According to data from the General Insurance Council, the four public sector undertakings (PSUs)—New India Assurance, Oriental Insurance, National Insurance, and United India—collected a combined premium of ₹27,787 crore, up from ₹24,233 crore in the corresponding quarter the previous year.

Among them, New India Assurance led with a 15.2% growth, collecting ₹12,299 crore. Oriental Insurance grew by 21.4%, National Insurance by 14.93%, and United India by 7.17%. New India Assurance also increased its market share from 14.67% to 15.51%. Similarly, Oriental Insurance expanded its market share from 6.46% to 7.34%, while National Insurance grew from 4.78% to 5.04%.

In contrast, major private insurers like ICICI Lombard reported minimal growth—just 0.61% with ₹7,734.86 crore in premium. Bajaj Allianz posted a 9.63% increase, while Reliance General Insurance grew by only 1.60%. Notably, ICICI Lombard’s market share dropped from 10.57% to 9.75%.

The entire general insurance industry underwrote a total premium of ₹79,301 crore in Q1 FY25, registering an 8.84% year-on-year growth. Within this, the total health premium underwritten rose by 8.12% to ₹32,343 crore, which is a significant drop from the 16.58% growth recorded during the same quarter in FY24. Specifically, the non-life insurance industry’s premium for June 2025 stood at ₹23,422.5 crore, reflecting a 5.2% growth—down from 8.4% in June 2024.

One of the key reasons for this slowdown is the industry-wide transition to the “1/n rule,” an accounting method that distributes commissions for long-term policies evenly over the policy duration rather than recognizing the full amount upfront. This rule change has had a particular impact on PSU insurers by lowering the reported premiums in the initial reporting periods.

Moreover, premiums collected from government-sponsored health insurance schemes have fallen significantly. Several state and central schemes have transitioned from insurance-based to trust-based models, leading to a decline in insurer revenues from these programs.

Adding to the challenges are steep hikes in health insurance premiums, driven by increased medical costs, 18% GST, and rising hospital charges. These factors have placed financial stress on households, resulting in weaker consumer demand. Consequently, retail health insurance growth has decelerated to about 10–13% in FY25, down from 20–25% in previous years.

Despite these setbacks, non-life insurance premiums have surpassed ₹3 lakh crore in FY25. This growth has been supported by favorable regulatory measures, greater adoption of Insurtech, rapid digitalization, and the expansion of India’s middle class. The government’s Bima Trinity initiative is expected to further strengthen the sector.

Looking ahead, motor insurance growth is anticipated to align with vehicle sales and changes in third-party insurance tariffs. Additionally, the proposed introduction of composite licences could reshape market competition. However, rising competition and global geopolitical uncertainties remain important risks to monitor.