India’s micro-insurance segment crossed a significant milestone in 2023-24. New business premium (NBP) in the sector surpassed Rs 10,000 crore for the first time, according to the Insurance Regulatory and Development Authority of India (Irdai) Annual Report.
Overall, NBP in the segment reached Rs 10,860.39 crore, marking a 23.5% increase from Rs 8,792.8 crore in FY23.
Micro-Insurance Premiums Surge as Private Insurers Lead
While individual NBP fell by 23.78% year-on-year (Y-o-Y) to Rs 152.57 crore, group NBP saw a rise of 24.61% Y-o-Y, reaching Rs 10,707.82 crore. Private life insurers played a pivotal role in this growth, contributing over Rs 10,708 crore, while the state-owned Life Insurance Corporation of India (LIC) accounted for nearly Rs 152 crore.
Private insurers collected group premiums of Rs 10,690.73 crore from 469 schemes, while LIC gathered Rs 17.09 crore from 4,993 schemes. The total number of individuals covered under these micro-insurance schemes stood at 178.39 million.
Growing Network of Micro-Insurance Agents Drives Expansion
By the end of FY24, the number of micro-insurance agents reached 102,000, with 19,166 agents from public-sector life insurers and the remainder from private insurers. Of these agents, non-government organisations made up 4.49%, self-help groups 0.25%, microfinance institutions 0.24%, business correspondents 0.12%, and others formed 94.90%.
The micro-insurance segment provides affordable insurance products to help low-income individuals manage financial risks. Irdai’s regulations introduced in 2005 and micro-insurance norms in 2015 played a crucial role in boosting sales. These regulations offer life, pension, or health benefits of up to Rs 2 lakh, with premiums for micro-variable insurance products capped at Rs 6,000 annually.
The introduction of “micro-insurance agents” has further driven growth, utilizing grassroots organizations like cooperatives and self-help groups to reach a broader low-income audience in the micro-insurance segment.
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