Page 18 - The Insurance Times July 2025

due to limited financial documen- In April, life insurers had already more - compared to the earlier Rs 1
tation. shown signs of recovery, posting an crore standard.
8.43% YoY increase in NBP, largely due
Life Insurers' New Business to LIC's 9.9% rise. Private players grew "Customers are going for higher
coverage, even up to Rs 5 crore," said
Premium Rises 13% in by 6% in April, a traditionally slow Varun Agarwal, Head of Term
month post-tax season.
May, Driven by Private Insurance at Policybazaar. "But
Sector Growth Term Life Buyers Choose instead of pushing cover to 75-85 years,
most prefer coverage till 60-70, aligned
India's life insurance sector witnessed Higher Cover, Shorter with key financial responsibilities."
a strong 12.68% year-on-year growth Duration Amid Rising
in new business premium (NBP) for
May 2025, reaching Rs 30,463 crore, Costs ICICI Prudential Life
as per data released by the Life Term life insurance buyers in India are Launches Market-Linked
Insurance Council. The surge was increasingly opting for higher coverage
largely driven by private insurers, amounts but for shorter policy tenures, Plan for Young Investors
which recorded a robust 16.6% driven by greater awareness and ICICI Prudential Life Insurance has
growth with premiums totaling Rs affordability concerns, according to launched a new market-linked
12,058 crore. industry insiders. Data shows a insurance plan (ULIP) specifically
State-run Life Insurance Corporation of noticeable shift in customer tailored for young investors, aiming to
India (LIC) also contributed to the rise, preference away from long-term combine life cover with long-term
reporting a 10.3% year-on-year policies extending beyond age 70. wealth creation. The plan, designed
increase in NBP to Rs 18,405.05 crore. In 2025, 62.5% of customers chose for digitally-savvy and goal-oriented
In the non-life insurance segment, cover until age 70 or less, up from 47% individuals, allows policyholders to
gross direct premiums underwritten in 2023. Conversely, the share of invest in equity and debt funds while
rose 6.3% YoY to Rs 22,126.72 crore. policies with coverage beyond age 70 offering life protection throughout the
General insurers saw a 5.72% increase dropped to 36.8% from 52% during the policy term.
to Rs 19,209.97 crore, while same period. Policyholders are also Key features include flexibility in
standalone health insurers grew nearly now more inclined to opt for higher premium payment, goal-based fund
10% to Rs 2,916.75 crore. sum insured amounts - Rs 2 crore or options, and tools for automated
portfolio rebalancing to suit changing
LIC Faces Growth Challenges Amid Overdependence risk appetites. It also offers loyalty
on Group Business additions and wealth boosters to
enhance returns over time.
As Sat Pal Bhanoo assumes interim charge as Managing Director and CEO
of Life Insurance Corporation of India (LIC), analysts highlight persistent ICICI Prudential Life emphasized that
challenges facing the state-run insurer. These include declining market share, the product is ideal for young
heavy reliance on group insurance business, and a skewed distribution professionals planning for milestones
strategy dominated by agency channels. like education, marriage, home
Under outgoing chief Siddhartha Mohanty, LIC's total premium income saw ownership, or early retirement. With
only a modest rise-from Rs. 4.74 trillion in FY23 to Rs. 4.88 trillion in FY25. increasing interest in financial
New Business Premium (NBP) also rose slightly to Rs. 62,495 crore from Rs. independence and disciplined
58,757 crore over the same period. However, LIC's market share slipped to investing, the insurer aims to attract
57.05% in FY25 from 62.3% in FY23, indicating lagging growth compared to first-time insurance buyers looking for
private players. dual benefits of protection and
Experts note LIC's overexposure to the group segment limits growth investment growth.
potential. "To regain momentum, LIC must expand its individual business This launch reflects the company’s
base and target younger demographics," said an analyst. Addressing its strategy to cater to the evolving
outdated distribution model is also seen as crucial for reversing the market preferences of India’s youthful investor
share decline. base.

16 July 2025 The Insurance Times