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Life Insurers' Capital Surges 7.12% to ₹39,714 Cr
6 Jan
Summary
- Life insurance sector capital increased by 7.12% to ₹39,714 crore.
- Industry profits grew by 18.14% to ₹56,006 crore in FY25.
- New FDI norms are expected to impact the industry in 1-2 years.
The Indian life insurance sector's paid-up capital experienced a robust growth of 7.12%, amounting to ₹39,714 crore in the fiscal year 2024-25. This expansion was primarily driven by substantial capital injections into companies like Tata AIA Life Insurance and investments from other life insurers. The total paid-up capital saw a net increase of ₹2,641 crore.
Financial performance for the industry also showed significant improvement, with profits after tax growing by 18.14% to ₹56,006 crore in FY25. Out of 25 operating life insurers, 18 reported profitability. Renewal premiums continued to be the primary revenue stream, constituting 55% of the total premium underwritten, while new business premium saw a 5.12% growth.
Looking ahead, the implementation of new Foreign Direct Investment (FDI) norms allowing 100% ownership is not expected to yield immediate results. Industry experts predict its impact will materialize over the next one to two years, with the general insurance sector likely to see earlier traction. This cautious outlook mirrors previous experiences with FDI limit increases.
