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India’s life insurance industry has witnessed a slowdown in its growth rate. In October, the Annual Premium Equivalent (APE) saw a year – over – year (YoY) increase of only 10.6%, a significant drop from the 23.8% rise in September. This deceleration came after a strong first half of fiscal year 2025 (FY 2025). Private insurers, which rely heavily on the bancassurance channel, were the main drivers of growth during the initial period. In contrast, LIC depends on the agency channel for over 90% of its individual new business premiums. This analysis is according to a research note by CareEdge Ratings.
Industry experts at CareEdge anticipate that recent adjustments to product and commission structures will result in variable premium trends during the second half of FY 2025. Nevertheless, these changes are expected to be advantageous for customers in the long run. They are likely to support an industry growth rate of approximately 11% to 13% over the next three to five years.
The shift towards the agency channel is likely to be spurred by banks focusing on deposit collection and insurance companies’ attempts to diversify away from bancassurance. However, adverse economic conditions could pose challenges to this growth trajectory.
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