Life Insurance Penetration Dips in FY25, But Industry Profits Soar 18%

• India's life insurance penetration fell to 2.7% in FY25 from 2.8% a year ago, while overall insurance penetration remained flat at 3.7%.
• The life insurance industry's premium income grew by 6.73% to Rs 8.86 lakh crore, with private insurers showing 12.07% growth, outpacing the public sector's 2.75%.
• Despite strong premium growth, investment income for the life insurance industry declined by 10.86% to Rs 5.51 lakh crore, largely due to a sharp 35.59% drop for private sector insurers.
• Profitability was a bright spot, with the industry's profit after tax rising by 18.14% to Rs 56,006 crore in FY25, with both public and private sectors reporting increases.
• The sector's paid-up capital strengthened by 7.12% to Rs 39,714 crore, driven by fresh capital infusions including Rs 1,600 crore into Tata AIA Life Insurance Company.

Why It Matters: FY25 saw a dip in life insurance penetration but strong profit growth and capital strengthening for the industry.