Microfin woes keep taking a toll on group insurance

AFTER PUSHING OVER 50 million lives out of cover in the previous fiscal, group insurance is heading towards another year of contraction.

- NARAYANAN V

Top private life insurers continue to report a sharp decline in lives covered as slower microfinance disbursals hit group credit life policies.According to latest public disclosures, the number of lives covered by the top four private life insurers fell 36% year-on-year to 49 million in the first half of FY26. This decline comes on top of a 28% fall in the previous year, when lives covered dropped by a record 50 million to 128 million. The contraction in coverage in group business is closely linked to a slump in underlying loan disbursals, particularly in microfinance, where life cover is typically bundled with loans.

Sarvesh Kumar Mishra, chief third party distribution officer at Generali Central Life Insurance, said while the broader group business of life insurers has not been fully impacted, the microfinance-linked segment - largely credit life policies - has seen a slowdown.