Insurance seeks cover after change and turbulence

Regulatory shocks and withdrawal of a tax benefit slowed down growth, nudging firms to focus on affordability, efficiency and chasing more customers

- BS REPORTER

Recent years have been turbulent for the insurance industry due to direct and indirect tax reforms, regulatory overhaul and other external pressures. The events cumulatively slowed growth rate to single digits from the high teens seen earlier. With the dust settling on the measures taken to mitigate the impact of the withdrawal of input tax credit (ITC), insurers are hopeful that the firefighting is behind them and they can now shift gears and focus on growth. They aim to build on the opportunity created by the goods and services tax (GST) rationalisation, which has made protection and health products more affordable and is expected to boost sales and improve insurance penetration.

The life insurance industry in FY25 reported new business premium (NBP) growth of 5.13 per cent, according to data from the Life Insurance Council. In FY24, growth was even slower at 2 percent. In FY23, life insurers reported NBP growth of almost 18 per cent. Non-life insurers’ premium collection grew 6.2 per cent in FY25, according to the General Insurance Council. In FY24 it grew nearly 13 per cent and a little over 16 percent in FY23.

The industry and its regulator are working on the challenges. “I draw strength from what Parliament has mandated: Protect policyholders’ interests and, on the other side of the coin, regulate, promote, and develop insurance in an orderly manner. Orderly development requires building a consensus on any reform,” said Ajay Seth, chairman of Insurance Regulatory and Development Authority of India (Irdai), at the Business Standard BFSI Insight Summit 2025 in October in Mumbai.