Insurance Industry Pays 70%
of Total Premium as Claims to Policyholders
Srinivasan S.,
Personal Finance Professional,
Ducatz Finserv
The latest
statistics from India’s insurance sector indicate that public trust in
insurance is steadily increasing. A key highlight from the financial year
2024–25 is that insurance companies paid around 70% of the total premium
collected as claims to policyholders. This significant data
comes from the report released by the regulator of the insurance industry in
India, the Insurance Regulatory and Development
Authority of India.
These
numbers reinforce the role of insurance not merely as a financial product but
as a crucial financial
protection mechanism for individuals and families.
Overview
of the Indian Insurance Industry – FY 2024–25
During the
financial year 2024–25, the Indian insurance sector recorded strong growth and
expansion. The industry sold approximately 41.84 crore insurance policies,
reflecting the rising awareness among Indians about the importance of financial
security and risk protection.
In the same year, insurance companies collected a total
premium of ₹11.93
lakh crore. Out of this, about ₹8.36 lakh crore
was paid back to policyholders as claims.
This demonstrates that insurance serves a meaningful
purpose by providing financial assistance when policyholders face uncertain
events such as death, illness, accidents, or policy maturity.
Key Statistics – FY 2025
|
Particulars |
Amount
/ Number |
|
Total Policies Issued |
41.84 Crore |
|
Total Premium Collected |
₹11,93,444 Crore |
|
Total Claims Paid |
₹8,35,980 Crore |
|
Claims as % of Premium |
70% |
|
Total Assets Under Management (AUM) |
₹74,43,516 Crore |
Claims Settlement Trend – FY
2024 vs FY 2025
|
Financial
Year |
Total
Premium |
Claims
Paid (%) |
|
FY 2024 |
— |
68% |
|
FY 2025 |
₹11.93 Lakh Crore |
70% |
The increase in the claims payout ratio indicates an
improvement in the claim settlement performance of the
insurance industry.
Claims Paid by Type of
Insurance
In FY 2024–25, claim payouts varied across different
segments of the insurance industry.
|
Insurance
Segment |
Claims
Paid (%) |
|
Life Insurance |
71% |
|
General Insurance |
59% |
|
Health Insurance |
77% |
Among these segments, health insurance
recorded the highest claim payout ratio, highlighting the
increasing usage of medical insurance policies for healthcare expenses.
Assets Under Management
(AUM) in the Insurance Sector
The total assets managed by insurance companies have also
grown significantly.
|
Segment |
Assets
Under Management |
|
Life Insurance |
₹67.79 Lakh Crore |
|
General Insurance |
₹6.24 Lakh Crore |
|
Health Insurance |
₹41,150 Crore |
|
Total
AUM |
₹74.45
Lakh Crore |
In FY 2024, the total AUM stood at ₹67.58
lakh crore, which increased to ₹74.45 lakh crore
in FY 2025, marking nearly 10% growth.
What Types of Claims Are
Included?
The total claims paid by insurance companies include
various types of payouts, such as:
·
Death
claims under life insurance policies
·
Maturity
benefits when policies complete their tenure
·
Cashless
medical claims under health insurance
·
Reimbursement
claims for medical expenses
However, the data does not provide detailed information
about the total
number of claim requests filed versus the number of claims settled.
What This Means for
Policyholders
These statistics reveal several important trends in the
Indian insurance industry:
1.
The
credibility
and reliability of the insurance sector are improving.
2.
Participation in
insurance products is increasing among the public.
3.
The
importance of health insurance is growing rapidly due
to rising healthcare costs.
4.
Insurance
companies are managing large volumes of financial assets,
indicating the sector’s strong financial position.
Conclusion
The data for
FY 2024–25 clearly reflects the strength and growing maturity of India’s
insurance sector. With 70% of the total premium collected
being paid out as claims, the industry continues to play a
vital role in protecting the financial interests of policyholders.
The rising Assets
Under Management (AUM), increasing number of policies sold, and improving
claims payout ratio together indicate that public confidence
in insurance is steadily strengthening in India. As awareness
grows, insurance is likely to become an even more important pillar of personal
financial planning and risk management in the years ahead.
Srinivasan S.,
Personal Finance Professional,
Ducatz Finserv
Ducatz
FinServ operates in Chennai and Tiruppur and is founded by Srinivasan
Subramanian, who serves as its Chief Personal Finance Consultant. He has over
13 years of expertise in personal financial management. He specializes in
personal finance, comprehensive financial planning, insurance planning,
budgeting, investment advisory, and wealth management.
Currently,
he provides financial guidance and support to more than 250 families, helping
them improve their financial stability and growth. Beyond individual client
services, he is deeply committed to promoting financial awareness within the
community. He also conducts financial literacy certification programs and
training sessions for college students through institutions and independent
classes, empowering young individuals with knowledge about financial discipline
and money management.
Read articles written by Mr. Srinivasan
S. in Nanayam Vikatan, a leading personal
financial management magazine. https://bit.ly/4r0Mlbp
AMFI
Registration Number : 64151
Ducatz
Finserv
Block
No.14, Flat No. G1, Jain Green Acres,
91, Dharga Road, Zamin Pallavaram,
Chennai - 600 043. Tamil Nadu. India.
Call us
on (+91) 995 260 4444
Email to connect@ducatz.in
Web Site:
www.ducatz.in
