2024 in Review: The future of life insurance – trends to watch for 2025

The year 2024 has been transformative for India’s life insurance sector, marked by regulatory advancements, evolving customer needs, and innovative product developments. These changes have driven industry growth and reinforced its role in securing the financial well-being of millions of Indian families. The sector has shifted towards greater digitalisation, improved product offerings, and enhanced accessibility, setting the stage for continued growth in 2025.

Sustained growth through digitalisation and strengthening distribution models

The life insurance industry has seen significant growth, with an 11% CAGR in gross written premiums (GWP) between FY2020-21 and FY2022-23, accelerating to an 18.56% year-on-year increase in 2024. This growth is driven by rapid digital transformation and a shift in consumer behavior towards life insurance protection. Insurers are integrating advanced technologies like mobile apps, chatbots, and virtual assistants to simplify customer interactions and provide 24/7 support.

Traditional distribution models, such as the agency model and bancassurance partnerships, remain crucial in expanding insurance reach, especially in underserved areas. Insurers are empowering agents with digital tools, better training, and need-based solutions, while bancassurance partnerships leverage banks’ extensive customer bases to improve access to financial protection.

Customer-centric Innovations powering product evolution

Post-pandemic customer preferences have reshaped life insurance products. While term life policies remain popular, there is a growing demand for products offering both protection and savings. Insurers are introducing versatile solutions, such as savings-oriented plans with market-linked returns and goal-oriented solutions like child education and retirement plans. Customizable riders, including health and wellness options, provide added flexibility, allowing customers to tailor policies to their individual needs.

Regulatory reforms paving the way for efficiency and transparency

In 2024, the Insurance Regulatory and Development Authority of India (IRDAI) introduced progressive reforms to enhance operational efficiency and customer satisfaction. Key measures include flexible premium payments, extended free-look periods, and provisions for policy loans and partial withdrawals. These changes aim to streamline operations, enhance product innovation, and support the vision of achieving ‘Insurance for All’ by 2047.

Trends Shaping 2025

Several key trends are expected to shape the life insurance sector in 2025:

• Rising demand for long-term savings products amid market volatility.
• Increased focus on goal-oriented solutions for specific life milestones.
• Evolution of distribution models with digitally empowered agents and bancassurance partnerships.
• Emphasis on customer ease and convenience through embedded solutions and tech integrations.

As insurers continue to innovate and expand their distribution networks, the future of life insurance in India looks bright. With a strong focus on customer-centricity, operational efficiency, and regulatory compliance, the industry is well on its way to realizing IRDAI’s vision of ‘Insurance for All’. By driving technological advancements, enhancing distribution models, and aligning with the government’s vision, the life insurance sector is laying the foundation for a more inclusive and secure financial future for all Indians.

Sudeep P B, Chief Distribution Officer, Proprietary andPNB Channel, PNB MetLife