Life insurance grew 2.5x in decade, major reforms on horizon: IRDAI

The life insurance sector's top line grew 2.5 times in the last decade, says IRDAI's Ajay Seth. Major reforms are underway, with the Bima Sugam digital platform expected by September end and a consultation paper on distribution reform by July.

The life insurance sector's top line increased by 2.5 times in line with the national economy over the last decade, marking a significant milestone. Alongside this growth trajectory, major structural changes are underway as insurance products are expected to go live on the digital platform Bima Sugam by September end, and consultation paper on distribution reform by the end of July, said Insurance Regulatory and Development Authority of India (IRDAI) Chairman Ajay Seth.

Addressing these developments, Seth highlighted the sector's performance while speaking at the Insurance Awareness Day 2026 initiatives organised by the Insurance Awareness Committee (IAC-Life) in Mumbai. He noted that the industry is seeing a significant rise in interest from foreign promoters aiming to secure 100 per cent ownership, following the government opening 100 per cent Foreign Direct Investment (FDI) in the sector.

Major Reforms on the Horizon: Bima Sugam and Distribution

Though the rollout of the Bima Sugam platform is running slightly behind schedule, Seth mentioned that the final integration of products by September end is poised to alter the distribution landscape. Crucially, the Bima Sugam model does not depend on a commission structure, marking a shift from traditional insurance distribution.

To further streamline the sector, the regulator expects a consultation paper on distribution reforms to come before the end of July.

"The life insurance sector is at a crossroads where it has to look for, or rather search for, its value proposition," Ajay Seth said.

Sector Performance and Future Growth Potential

While general insurance growth is currently faster than life insurance, the regulator sees life insurance achieving much more growth going ahead. The macroeconomic expansion serves as a benchmark for this potential.

"In the last 10 years, the economy of our country has increased two and a half times. The life insurance sector, top line, also increased by 2.5 times. One was 2.5, another was 2.6. No substantive difference," Seth stated.

"This itself is a commendable task because the economy of our country is going at a fast pace. But considering that, there are rising income levels and there's a huge unmet need. The sector has the potential to grow much faster than what has been possible so far. And there comes the economics of the sector, how do we improve upon it?" he explained.

Expanding into Untapped Markets

To unlock this growth, the IRDAI chief emphasized that companies must focus on Tier-II and Tier-III cities, as well as rural markets, moving beyond standard urban boundaries. The focus must expand across all income group levels to establish a deeper consumer base, supported by an immediate need to enhance trust for insurance products.

Furthermore, registration trends indicate a broader expansion, with the regulator having recently granted two new licenses for general insurance, including one approval finalized just yesterday. The regulatory authority continues to see more interest coming on the general insurance side, driven by rising income levels and significant unmet consumer needs. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)