Tier-III cities drive 62% of new insurance premiums: Report
HighlightsA recent report from Probus, an InsurTech and insurance broking firm, reveals that Tier-III cities and smaller towns are now responsible for approximately 62 per cent of new insurance premiums in India for the current fiscal year. The motor insurance segment experienced significant growth of 25.6 per cent in fiscal year 2024-25, driven by increased awareness, digital access, and an expanded Point-of-Sale Person network. Fresh life insurance policies saw a growth exceeding 60 percent in fiscal year 2024-25 compared to the previous year, while Small and Medium Enterprise insurance emerged as the fastest-growing segment with 112 percent increase.
A new report from Probus, an InsurTech and insurance broking firm, indicates that Tier-III cities and smaller towns are now significant contributors to India's new insurance business. The report states that these regions account for approximately 62 per cent of total new insurance premiums in the current fiscal year.
This trend suggests a shift in how new insurance business is generated in India. Smaller towns, aided by
digital payment infrastructure
like
UPI
and increased internet access, are showing higher rates of digital adoption.
Probus highlights that this is a consistent pattern, with the contribution from these regions rising from 58 per cent to 62 per cent over the past three fiscal years.
For the fiscal year 2024-25, the motor insurance segment saw notable growth at 25.6 per cent. This was attributed to increased awareness, digital access, and an expanded Point-of-Sale Person (PoSP) network.
The report also observes that local distribution methods, including app-based onboarding and regional language interfaces, have facilitated wider access to insurance products. What may have been a compliance-driven purchase is increasingly being viewed as a financial planning tool in these areas.
Across insurance verticals, fresh life insurance policies showed growth exceeding 60 per cent in FY 2024-25 compared to FY 2023-24. Non-life insurance, encompassing motor, health, and SME segments, also experienced growth. SME insurance emerged as the fastest-growing segment in FY 2024-25, with a 112 per cent increase.
Rakesh Goyal, director, Probus, commented on the findings, noting the resilience of the Indian economy and the role of Tier-II and Tier-III cities in this. He stated that Probus's approach aligns with the goal of 'Insuring India by 2047,' by providing digital tools and strengthening PoSP models to offer insurance solutions to consumers in these emerging markets.
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