Finance and company affairs minister Nirmala Sitharaman has directed public-sector common insurance coverage firms (PSGICs) to develop progressive insurance coverage merchandise tailor-made to new and rising dangers, together with cyber fraud, and to diversify their product portfolio in keeping with evolving shopper wants in a bid to strengthen operations and generate earnings.
Three PSGICs–Oriental Insurance coverage, United India Insurance coverage and Nationwide Insurance coverage–which have been perpetually working into losses for the previous few years, have generated some earnings within the earlier fiscal yr. The federal government now needs these entities to keep up their development path and broaden operations whereas serving to in realising the ‘insurance coverage for all’ purpose.
Sitharaman made the feedback whereas chairing a overview assembly of PSGICs on Wednesday. The assembly was attended by secretary, division of economic providers (DFS) M. Nagaraju, and the managing administrators of PSGICs—New India Assurance, United India Insurance coverage, Oriental Insurance coverage, and Nationwide Insurance coverage, Basic Insurance coverage Company of India (Reinsurance), Agriculture Insurance coverage Firm of India Restricted—together with different senior officers of the finance ministry.
Throughout the assembly, the FM reviewed key efficiency indicators together with premium collections, insurance coverage penetration and density, and incurred claims ratios. It was famous that the full premium collected by PSGICs has witnessed a notable rise from round ₹80,000 crore in 2019 to just about ₹1.06 trillion in 2025. The general common insurance industry additionally reported development, with complete premium collections reaching ₹3.07 trillion in FY 2024–25.
Whereas common insurance coverage penetration in India stays comparatively low at 1% of GDP — in comparison with a world common of 4.2% in 2023 — insurance coverage density has steadily improved, growing from $9 in 2019 to $25 in 2023.
The finance minister underscored the necessity for PSGICs to work in the direction of bettering each penetration and density to make sure wider monetary safety.
Officers additionally offered a five-year evaluation of the medical insurance section, displaying constant premium development throughout personal insurers, standalone well being insurers, and PSGICs. Incurred claims ratios, which had peaked in the course of the covid-19 pandemic in FY21 (PSGICs at 126% and personal insurers at 105%), have since declined. By FY24, these ratios had moderated to 103% for PSGICs, 89% for personal insurers, and 65% for standalone well being insurers.
The PSGICs have witnessed a major turnaround with all of them having turn into worthwhile once more. Whereas Oriental Insurance coverage Firm Ltd. (OICL) and Nationwide Insurance coverage Firm Ltd. (NICL) began posting quarterly earnings from This fall and Q2 of FY 2024-25, respectively, United India Insurance coverage Firm Ltd. (UIICL) posted revenue in Q3 of FY 2024-25 after a niche of seven years. Notably, New India Assurance Firm Ltd. (NIACL) has constantly maintained its place as a market chief and has been making earnings commonly.
Push for digital transformation
Throughout the overview, Sitharaman emphasised the pressing want for digital transformation throughout all PSGICs to enhance service supply and effectivity. This consists of the adoption of AI-driven declare settlement programs, notably for Motor Personal Injury and medical insurance merchandise, to make sure quicker and extra correct declare decision.
The significance of strong underwriting practices and portfolio optimisation was additionally highlighted, with directions to align mixed ratios with world trade benchmarks to safeguard profitability and monetary stability.
Buyer-centricity was recognized as a core focus space. The finance minister directed PSGICs to promptly tackle buyer grievances, strengthen social media engagement, and guarantee seamless integration with the account aggregator system, together with end-to-end digital know your buyer (KYC) processes.
These measures are designed to simplify onboarding and to enhance the shopper expertise.
To broaden market attain and strengthen service accessibility, PSGICs have been inspired to pursue strategic collaborations with intermediaries, fintechs, and insurtech corporations. These partnerships are anticipated to strengthen the nationwide presence of PSGICs and deepen insurance coverage penetration throughout demographics.
Sitharaman additionally emphasised the significance of leveraging superior knowledge analytics and synthetic intelligence to develop exact pricing fashions and environment friendly claims modelling, that are important for improved threat evaluation and long-term sustainability.
The PSGICs have been instructed to implement these instructions in a time-bound method. Common opinions can be carried out to observe progress and make sure the achievement of supposed outcomes.
