Life insurers’ new business grows 15.7% in FY26 vs 5.1% in FY25; private players outpace LIC

India’s life insurance sector staged a broad-based recovery in FY26, with new business premiums (NBP) registering a strong double-digit expansion, supported by regulatory normalisation, improved traction across segments, and a sharp year-end push.

A report by CareEdge Ratings shows that new business premiums (NBP) rose 15.7% year-on-year in FY26, significantly higher than the 5.1% growth recorded in FY25, led by private insurers, which outpaced state-owned Life Insurance Corporation of India, the country’s largest insurer. The recovery comes as the industry adjusted to regulatory changes introduced in late 2024, with business volumes now returning to normal.

The momentum was especially visible in March 2026, when premiums jumped 23.5% year-on-year. This surge was driven by year-end seasonality, a favourable base, and higher closure of group policies—something typically seen at the end of the financial year, the report noted.

According to CareEdge Ratings, the industry has now largely adjusted to the new surrender value rules, and growth is expected to stabilise going forward. Factors such as new product launches, expanding distribution networks, and increasing use of digital platforms are likely to support steady growth in the coming years.

Sanjay Agarwal, Senior Director, CareEdge Ratings, said the industry maintained strong momentum through FY26, with APE growth improving to 14.5% year-on-year from 9.4% last year. He noted that the recovery was broad-based across both individual and group segments, and March saw a sharp acceleration due to favourable base effects and year-end policy closures.

“The industry now appears to have largely adjusted to the revised surrender value framework, and growth is expected to remain stable at 8%-11% over the medium term, supported by product diversification, regulatory support, and continued expansion of digital distribution channels,” he said.

Private insurers slightly outpaced Life Insurance Corporation of India (LIC) in growth terms. While private players posted a 16.7% rise in new business premiums, LIC grew at 14.9%. However, LIC continued to dominate the market, holding a 56.7% share of total new business premiums.

A key driver of this growth was the group insurance segment, which expanded 19.2% in FY26, compared to just 1.2% growth last year. Demand for employer-linked products such as gratuity and group protection schemes played a major role here, partly supported by evolving labour-related requirements.

On the other hand, the individual segment remained stable, growing 10.8% during the year. Private insurers continued to lead in this space, especially in regular premium (non-single) products, while LIC maintained its strength in single-premium policies.

Overall, single-premium business grew 16.5% in FY26, a sharp jump from 2.4% in FY25, while non-single premiums rose 14.2%, indicating balanced growth across product categories.

According to Saurabh Bhalerao, Associate Director, CareEdge Ratings, both LIC and private insurers delivered strong performance, with private players growing faster even as LIC regained momentum. He highlighted that group business growth was particularly robust, driven by rising demand for employer-linked products such as gratuity and protection schemes, partly due to evolving labour-related requirements. He also pointed to new product launches and favourable GST changes as supporting factors.

“The sharp increase in premiums in March 2026 reflects a combination of year-end seasonality, favourable base effect, and catch-up in group business, particularly in single-premium policies. With distribution networks strengthening and digital initiatives such as Bima Sugam under the broader Bima Trinity framework gaining traction, the industry is well positioned to sustain steady growth over the medium term,” he added.