India’s life insurance industry recorded its strongest monthly performance in nearly two years in December 2025, signalling a solid recovery after earlier contractions in the year.
According to CareEdge Ratings, new business premiums rose 39.5% year on year to $4.6 billion (₹421.5 billion) in December. This marks a sharp rebound from the 5.2% contraction seen in August 2025 and the 21.5% decline recorded in December 2024.
Sustained Momentum After Months of Recovery
December 2025 marked the fourth consecutive month of double-digit growth, reflecting improving demand conditions across the life insurance sector. The recovery was broad-based, spanning both individual and group segments, with a notable surge in group premiums and policy issuances.
LIC Outpaces Private Insurers
The Life Insurance Corporation of India (LIC) outperformed private insurers during the month, benefiting from a favourable base and adjustments following the GST waiver on individual life insurance policies. This policy change helped improve affordability and boosted sales, particularly for recurring premium products.
Meanwhile, private insurers also delivered healthy growth, supported by expanding distribution networks and digital initiatives.
APE Growth Strengthens Industry Outlook
The industry’s Annual Premium Equivalent (APE) rose 28.3% year on year in December 2025. LIC led the charge with a 44.1% increase, while private insurers reported a 22.8% rise.
On a year-to-date FY26 basis, APE growth stood at 12.8% year on year, underlining sustained improvement in business momentum.
Demand Normalisation and Policy Support
CareEdge noted that demand is normalising following the GST waiver on individual life and health insurance premiums. The regulatory relief has improved affordability and encouraged customers to opt for long-term and recurring premium products.
Growth Outlook Remains Positive
Looking ahead, CareEdge expects India’s life insurance industry to grow at a compound annual growth rate (CAGR) of 8% to 11% over the next two years. This growth will be supported by:
- Continued regulatory measures
- Ongoing product innovation
- Wider digital adoption across insurers
Private insurers are also expanding their regional footprint and rolling out digital platforms such as Bima Sugam under the Bima Trinity framework, which is expected to strengthen distribution efficiency and support long-term industry growth.
Conclusion
December 2025 marked a turning point for India’s life insurance sector, with strong premium growth, improving affordability, and supportive regulatory changes laying the foundation for sustained recovery. With digital transformation and policy support gaining momentum, the industry appears well-positioned for steady growth in the coming years.
