India insurance shifts omni-channel as commissions jump to $11.9b in FY 2025

Distribution power is moving past agents with bancassurance driving most gains.

India’s insurance industry has shifted from being largely agent-led to an omni-channel distribution model, with total premiums rising from $45.7b (₹4,150b) in fiscal year 2015 (FY 2015) to $131.2b (₹11,930b) in FY 2025, translating to a compound annual growth rate of 11.1%, according to CareEdge Ratings.

Growth has been supported by rising incomes, wider use of financial products, regulatory changes, new products, and broader distribution reach.

Whilst individual agents remain a key channel, most of the incremental growth over the past decade has come from bancassurance and alternative channels, especially in non-life insurance, as customers look for easier access and more transparent buying options.

The Insurance Regulatory and Development Authority of India’s Bima Sugam platform is expected to support this shift by bringing life and non-life products and multiple distribution channels onto a single digital marketplace.

In life insurance, agents continue to dominate the sale of long-term savings and protection products, but bancassurance has strengthened its position by using banks’ large customer bases and cross-selling capabilities.

Direct and digital channels have expanded quickly, particularly in group insurance, where large institutional policies are usually sold directly by insurers with limited involvement from intermediaries.

In non-life insurance, brokers account for a large share of commercial and group health business because of the need for customised covers and risk advisory.

Direct and digital channels have gained ground in retail motor and health, whilst bancassurance has become more focused on health products.

Alternative channels, although still small in overall share, are growing fast and are helping extend insurance access in semi-urban and rural areas.

Industry-wide commissions rose from $5.3b (₹480b) in FY 2021 to $11.9b (₹1,080b) in FY 2025, driven mainly by growth in non-life insurance, whilst life insurance commissions increased at a steadier pace.

Over the same period, total customer grievances climbed from 1.99 lakh to 2.58 lakh, largely due to higher volumes in non-life, but resolution rates stayed high at above 98% for life insurance and over 93% for non-life.

Insurers have stepped up controls to curb mis-selling, particularly in bancassurance and broker channels.

CareEdge expects the Indian insurance industry to grow by 8% to 11% in FY 2026 and FY 2027, with distribution moving further towards an integrated omni-channel model where physical advice, assisted digital sales, and fully digital platforms operate side by side.

It said initiatives such as Bima Sugam and wider digitisation are likely to improve reach, operating efficiency, and transparency across the sector.

($1.00 = ₹91.91)