New Delhi, May 29 (IANS) The total premium collected by public sector general insurance companies (PSGICs) has witnessed a notable rise from around Rs 80,000 crore in FY19 to nearly Rs 1.06 lakh crore in FY25, the government has said.
The overall general insurance industry also reported growth, with total premium collections reaching Rs 3.07 lakh crore in FY2024–25.
In a meeting with PSGICs here, Finance Minister Nirmala Sitharaman reviewed key performance indicators including premium collections, insurance penetration and density and incurred claims ratios.
The meeting was attended by Secretary, Department of Financial Services (DFS), M. Nagaraju, and the managing directors of New India Assurance, United India Insurance, Oriental Insurance, and National Insurance, General Insurance Corporation of India (Reinsurance), Agriculture Insurance Company of India Limited, along with other senior officials of the Finance Ministry.
While general insurance penetration in India remains relatively low at 1 per cent of GDP — compared to a global average of 4.2 per cent in 2023 — insurance density has steadily improved, increasing from $9 in 2019 to $25 in 2023.
The Finance Minister underscored the need for PSGICs to work towards improving both penetration and density to ensure wider financial protection.
Officials also presented a five-year analysis of the health insurance segment, showing consistent premium growth across Private Insurers, Standalone Health Insurers (SAHI), and PSGICs. Incurred claims ratios, which had peaked during the Covid-19 pandemic in FY21 (PSGICs at 126 per cent and private insurers at 105 per cent), have since declined.
By FY24, these ratios had moderated to 103 per cent for PSGICs, 89 per cent for private insurers, and 65 per cent for SAHI.
The PSGICs have witnessed a significant turnaround with all of them having become profitable again.
While Oriental Insurance Company Ltd. (OICL) and National Insurance Company Ltd. (NICL) started posting quarterly profits from Q4 of FY 2023-24 and Q2 of FY 2024-25, respectively, United India Insurance Company Ltd. (UIICL) posted profit in Q3 of FY 2024-25 after a gap of 7 years.
Notably, New India Assurance Company Ltd. (NIACL) has consistently maintained its position as a market leader and has been making profits regularly.
Finance Minister emphasised the urgent need for digital transformation across all PSGICs to improve service delivery and efficiency. This includes the adoption of AI-driven claim settlement systems, particularly for Motor Own Damage and Health insurance products, to ensure faster and more accurate claim resolution.
The minister also emphasised the importance of leveraging advanced data analytics and artificial intelligence to develop precise pricing models and efficient claims modelling, which are essential for improved risk assessment and long-term sustainability.
—IANS
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