Public sector general insurance companies have significantly outperformed their private counterparts, leading premium growth in the June 2025 quarter.
Public Sector Insurers Lead the Way
The first quarter of the fiscal year 2025 saw public sector general insurance companies recording a robust 14.6 percent increase in gross premiums. This figure stands well above the industry average of 8.84 percent, demonstrating a strong performance from government-backed insurers.
Despite a general slowdown in health insurance premium growth across the industry, these public sector giants successfully expanded their market share. Together, the four major PSU general insurers mobilized Rs 27,787 crore in premiums for the June 2025 quarter, a notable rise from Rs 24,233 crore a year prior.
New India Assurance, the industry leader, reported a 15.2 percent growth, securing Rs 12,299 crore. Oriental Insurance saw an impressive 21.4 percent increase, while National Insurance grew by 14.93 percent and United India by 7.17 percent.
Market Share Shifts
The outperformance translated directly into market share gains for several PSUs. New India Assurance boosted its share from 14.67 percent in June 2024 to 15.51 percent in June 2025. Oriental Insurance also saw its share grow from 6.46 percent to 7.34 percent, and National Insurance increased from 4.78 percent to 5.04 percent.
In contrast, some private players experienced slower growth or even declines. ICICI Lombard recorded a mere 0.61 percent growth in premium, with its market share decreasing from 10.57 percent to 9.75 percent. Bajaj Allianz General Insurance posted a 9.63 percent growth, while Reliance General Insurance saw a modest 1.60 percent increase.
Industry Trends and Health Sector Challenges
The overall non-life insurance industry’s premium grew by 8.84 percent, reaching Rs 79,301 crore for the June quarter. However, the health insurance segment, a significant component, saw its growth decelerate to 8.12 percent (Rs 32,343 crore) in June 2025, a stark drop from the 16.58 percent growth reported in June 2024.
Industry experts point to several factors for this slowdown. A key change is the “1/n rule,” an accounting method where commissions for long-term policies are recognized evenly over time, rather than upfront. This change can lead to lower reported premiums in initial periods, particularly affecting public sector insurers.
Rising Costs and Policy Shifts
Premium collections from government health schemes have also decreased significantly. Many state and central programs are shifting from insurance-based models to trust-based funding, directly impacting the premium inflow for insurers.
Furthermore, steep hikes in health insurance premiums have strained household budgets. Factors like rising medical costs, an 18 percent GST, and increased hospital expenses have contributed to a decline in consumer demand, slowing retail health insurance growth to around 10-13 percent in FY25, compared to 20-25 percent in previous years.
Future Outlook for Non-Life Insurance
Despite these challenges, the non-life insurance sector is expanding, having crossed the Rs 3 lakh crore mark in FY25. This growth is supported by favorable regulations, increasing adoption of Insurtech, rapid digitalization, and a growing middle class.
The government’s “Bima Trinity” initiative is expected to further boost the sector. Standalone health insurers are poised to maintain their strong presence in the retail health market. The trajectory of motor insurance will continue to be linked to vehicle sales and upcoming revisions to third-party tariffs. While the proposed rollout of composite licenses could reshape the competitive landscape, rising competition and global uncertainties remain crucial watchpoints for the industry.
- Public sector general insurers significantly outpaced private players in premium growth during Q1 FY25.
- PSUs like New India Assurance and Oriental Insurance notably increased their market share.
- Health insurance premium growth has slowed due to policy changes, the “1/n rule,” and rising costs.
- The overall non-life insurance sector remains on a growth path, driven by digitalization and government initiatives.
The dynamics of the insurance market are clearly shifting, with public sector companies demonstrating resilience and strategic growth in a challenging environment.
