India’s life insurance industry posted a strong start to FY27, with new business premiums (NBP) rising 16.6% year-on-year (y-o-y) in the first quarter, driven by robust growth in private insurers, which continued to expand their market share amid sustained demand for retail protection and long-term savings products, according to a CareEdge Ratings report.
The industry’s Annualised Premium Equivalent (APE) also remained strong, increasing 23.4% y-o-y during Q1FY27. Private insurers outpaced the industry with 27.6% growth in APE, while Life Insurance Corporation of India (LIC) reported a healthy 16.8% increase.
Private insurers drive growth
The report said private insurers remained the key growth engine during the quarter, with their new business premiums expanding 27.5%, compared with 10.3% growth for LIC.
As a result, the private sector’s share of industry new business premiums climbed to nearly 40%, up from 36.5% a year earlier, although LIC continued to dominate the market with around 60% of total premiums.
June sees broad-based recovery
The momentum continued in June 2026, when industry new business premiums rose 13.1% y-o-y to ₹46,490.5 crore, reversing the 3.1% decline recorded in the same month last year.
Private insurers reported a sharp 36.8% increase in premiums, significantly outperforming LIC, which recorded a modest 1.2% growth.
Industry APE grew 27.7% in June, supported by broad-based growth across both private insurers (29%) and LIC (25.6%), indicating sustained strength in regular-premium business.
Retail products remain resilient
CareEdge Ratings said healthy demand for retail protection and long-term savings products continued to underpin growth in the individual segment.
Individual non-single policy volumes increased 7.3% y-o-y to 21.5 lakh policies in June. Private insurers led the growth with an 11.4% increase in policy volumes, while LIC returned to positive territory with 4.8% growth.
The report also highlighted a shift towards recurring-premium products. Non-single premiums surged 34.2% y-o-y in June, significantly outpacing single-premium products and improving the industry’s product mix by enhancing policy persistency and future cash-flow visibility.
Group business rebounds
The recovery was also supported by a revival in private insurers’ group business. Private insurers recorded 65.8% y-o-y growth in group single premiums, offsetting the 5.2% decline in LIC’s group single portfolio and helping the overall group single segment return to growth.
Group premiums increased 17.9% y-o-y in Q1FY27, outpacing the 14.1% growth in individual premiums. Despite this, institutional business continued to account for nearly two-thirds of total new business premiums.
Outlook remains positive
CareEdge Ratings expects the industry’s growth momentum to continue, supported by expanding digital distribution, stronger agency networks, increasing adoption of protection and annuity products, and a gradual recovery in group insurance business.
The report noted that potential regulatory changes in the bancassurance channel could encourage insurers to diversify distribution models and strengthen agency-led sales.
It also said the proposed cooperative life insurance company could improve insurance penetration in rural and underserved markets by leveraging the country’s extensive cooperative network, although increased competition may intensify pricing pressures.
However, CareEdge cautioned that the industry’s growth trajectory will continue to depend on product mix, competitive intensity, interest rate movements and global macroeconomic conditions. LIC’s ability to revive growth in its group insurance portfolio will remain a key factor to watch.