India life insurers post steady May growth despite policy volume drop

Annual Premium Equivalent by 14.4%.

India’s life insurance industry reported a year-on-year growth of 12.7% in May, with total premiums reaching Rs30,463.2 crore. 

The increase was higher than April’s 8.4% growth but lower than the 15.1% expansion recorded in May 2024, as the impact of revised surrender value regulations, implemented in October 2024, continues to affect the market.

The number of life insurance policies sold fell by 10.4% during the month, with individual non-single policies declining 10.5% to 16.7 lakh.

Despite the drop in policy volume, private insurers posted growth in individual non-single premiums, whilst LIC recorded a 7.8% decline in this segment. 

Private players’ performance was supported by a shift toward higher-value policies.

Annual Premium Equivalent (APE) rose by 14.4% in May, compared to 12.0% in May 2024. 

Between May 2023 and May 2025, the industry’s APE grew at a 13.2% CAGR, with private insurers growing at 13.8%, ahead of LIC’s 12.4%.

Growth in Unit Linked Insurance Plans (ULIPs) remained subdued due to market volatility, whilst group business was the main driver of May’s performance. 

Industry analysts expect insurers to increase focus on the agency channel as banks prioritise deposit mobilisation.

Regulatory developments, including the proposed Insurance Amendment Act and initiatives such as the Bima Trinity, are expected to support market expansion. 

CareEdge Ratings projects the industry to grow at 10% to 12% annually over the next three to five years, driven by private sector expansion, product innovation, and improved distribution strategies.