Life insurance industry seen growing 11-12% in FY27, private players to lead: Report

New Delhi: The Indian life insurance industry is expected to maintain its growth momentum in FY27, with retail annualised premium equivalent (APE) projected to grow 11-12 per cent, according to a report by Emkay Research.

Private life insurers are expected to lead the sector's growth, with retail APE likely to rise 13-14 per cent in FY27. For Life Insurance Corporation of India (LIC), retail APE is projected to grow 7-8 per cent, the brokerage said.

The outlook comes after healthy growth in August, when industry retail APE rose around 14 per cent year-on-year. Private insurers recorded around 15 per cent growth, while LIC grew around 13 per cent, although LIC's growth was supported by a low base.

On a two-year compound annual growth rate basis, industry retail APE grew around 7 per cent in August. Private insurers registered around 8 per cent growth, while LIC grew around 4 per cent.

For the April-August period, industry retail APE increased around 14 per cent, with private insurers growing 13 per cent and LIC recording 15 per cent growth.

LIC's retail weighted received renewal premium (RWRP) market share also improved by around 40 basis points to 29.9 per cent, according to the report.

Among listed private insurers, SBI Life remained the fastest-growing major player in August, with retail APE rising around 22 per cent year-on-year. HDFC Life followed with 17 per cent growth, while ICICI Prudential Life recorded 11 per cent growth on an RWRP basis.

Axis Max Life's growth moderated to around 10 per cent, which Emkay said was likely due to a slowdown in its agency channel. Canara HSBC Life recorded around 6 per cent growth on a high base.

The broader new business trend also remained positive. Total retail and group new business premium, measured on an RWRP basis, increased 9.1 per cent year-on-year in August.

Private insurers recorded 12.7 per cent growth, while LIC grew 3 per cent during the month, the report said.

Emkay said the growth outlook remains positive despite pressure on life insurance stocks due to impending commission regulations.

"We believe current valuations inadequately capture the franchise strengths—brand, distribution, and scale—of life insurance players," the brokerage said.

Emkay expects private insurers to remain the key drivers of growth in the life insurance sector, supported by healthy retail demand and strong distribution networks.