LIC Flags Insurance Slowdown: Penetration Drops to 2.8% Amid Premium Slump

India’s life insurance penetration fell to 2.8% in FY24 (vs. 3% in FY23), as flagged by LIC executives, with industry-wide new business premiums (NBP) plummeting 12% YoY to ₹29,986 crore in February 2025. LIC bore the brunt, seeing a 22% drop in premiums (₹15,514 crore) and 30% fewer policies sold, per IRDAI data. Private insurers eked out 3% growth, led by HDFC Life (+24%) and ICICI Prudential (+5%), while SBI Life (-18%) and Ageas Federal (-27%) struggled. New surrender norms, reducing agent commissions and easing exit charges, have disrupted sales. With 1.9M policies issued in February (vs. 2.2M in 2024), affordability and awareness gaps loom.

 

Sources: Outlook Money, Moneycontrol, Policybazaar