Union Finance and Corporate Affairs Minister Nirmala Sitharaman held a review meeting with Public Sector General Insurance Companies (PSGICs) in New Delhi on Wednesday. The meeting was attended by M. Nagaraju, Secretary of the Department of Financial Services, and the Managing Directors of New India Assurance, United India Insurance, Oriental Insurance, National Insurance, General Insurance Corporation of India (Reinsurance), and Agriculture Insurance Company of India Limited. Senior officials from the Ministry of Finance were also present.
Growth in Premium Collection and Industry Performance
Finance Minister reviewed key performance indicators such as premium collections, insurance penetration, insurance density, and claims ratios. Total premium collected by PSGICs rose from around ₹80,000 crore in 2019 to nearly ₹1.06 lakh crore in 2025. The general insurance industry as a whole also grew, with total collections reaching ₹3.07 lakh crore in FY 2024–25.
Insurance Penetration Still Low, Density Improving
Insurance penetration in India remains low at just 1% of GDP, compared to the global average of 4.2% in 2023. However, insurance density measured as premium per capita has improved from $9 in 2019 to $25 in 2023. The Finance Minister urged public insurers to improve both figures to ensure wider financial protection.
Health Insurance: Claim Ratios Decline Post-COVID
Officials shared a five-year analysis of the health insurance sector. Premiums grew steadily across private insurers, standalone health insurers (SAHI), and PSGICs. During the COVID-19 pandemic in FY21, incurred claim ratios peaked (126% for PSGICs and 105% for private insurers). These ratios have since come down to 103%, 89%, and 65% for PSGICs, private insurers, and SAHI, respectively in FY24.
All Public Sector Insurers Back in Profit
All PSGICs have returned to profitability. Oriental Insurance and National Insurance reported profits in Q4 FY 2023–24 and Q2 FY 2024–25, respectively. United India Insurance posted a profit in Q3 FY 2024–25 after seven years. New India Assurance has remained consistently profitable and continues to lead the market.
Call for Digital Transformation and AI Integration
The Finance Minister stressed the need for digital upgrades across all PSGICs. She recommended using AI-powered claim settlement systems for faster and more accurate resolution, particularly for Motor and Health insurance claims.
Focus on Innovation and Risk-Based Products
Sitharaman encouraged companies to develop new insurance products to address emerging risks like cyber fraud. She also highlighted the need to diversify offerings and improve underwriting practices. Companies were advised to aim for global standards in combined ratios for better financial health.
Customer Experience a Priority
Customer service was identified as a key area of improvement. The Minister directed insurers to address customer complaints quickly, boost social media engagement, and integrate with the Account Aggregator system. End-to-end digital KYC and easier onboarding processes were also emphasized.
Action Plan and Follow-Up
The Finance Minister instructed all PSGICs to implement the proposed changes within a set timeline. Progress will be monitored through regular reviews to ensure that the intended goals are achieved.
