NBFCs can distribute insurance without RBI approval
The Reserve Bank of India (RBI) has allowed non-banking financial companies (NBFCs) to distribute insurance products without seeking prior approval from the central bank. This is permitted provided that NBFCs obtain the necessary authorization from the Insurance Regulatory and Development Authority of India (IRDAI).
This regulatory change is part of the RBI’s Responsible Business Conduct (Second Amendment) Directions, 2026, which will come into effect from January 1, 2027. The revised framework allows NBFCs to engage in insurance distribution while ensuring compliance with all IRDAI regulations.
Industry experts say the move will broaden the insurance distribution network, especially in Tier-2 and Tier-3 cities where NBFCs already have a strong presence. Analysts also note that allowing NBFCs to enter insurance distribution could enhance competition, improve customer outreach, and reduce reliance on traditional channels like banks and corporate agents, thereby expanding the penetration of insurance products across underserved areas.
LIC engages regulators to expand long-term investment options
State-owned Life Insurance Corporation of India (LIC) is in active discussions with key financial regulators, including the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI), to expand access to long-term investment instruments. This initiative aims to support the rising inflows into LIC’s annuity products, which provide policyholders with guaranteed lifelong income.
Annuities convert a retirement corpus into regular payments for life, ensuring that savers do not outlive their retirement funds. LIC CEO and MD R Doraiswamy highlighted that with increasing adoption of annuity plans, the insurer requires matching long-term investment avenues to meet liability obligations efficiently.
Doraiswamy noted that IRDAI has been taking proactive steps to align regulatory provisions with evolving market needs. This coordination ensures insurance companies can continue to fund infrastructure and nation-building projects while safeguarding the interests of policyholders and maintaining regulatory compliance, creating a mutually beneficial scenario for both the industry and regulators.
LIC Explores Fintech Arm to Modernize Operations
Life Insurance Corporation of India (LIC) is actively considering establishing a fintech division, either through strategic partnerships or internal development, to strengthen its digital capabilities, CEO and MD R. Doraiswamy said. The initiative aims to modernize LIC’s IT infrastructure and bring innovative solutions to enhance operational efficiency and customer service.
Doraiswamy, who previously led the modernization of LIC’s Individual Business applications, emphasised that a balance between in-house development teams and collaboration with fintech and insurtech players is essential. “We are engaging fintech companies, and whether they become strategic partners or collaborators, we are exploring all options,” he stated. The primary objective is to create agile and responsive IT applications that keep the insurer competitive in a fast-evolving market.
As a major investor, LIC also views strategic investments in specialized fintech firms as an avenue to improve returns on policyholders’ funds. The initiative reflects the corporation’s broader commitment to digital transformation while enhancing shareholder value and operational scalability in the insurance and financial services sectors.
LIC may form subsidiary to manage real estate
Life Insurance Corporation of India (LIC) is exploring the creation of a separate subsidiary to manage its extensive real estate portfolio, which is conservatively valued at over Rs. 60,000 crore. The move aims to optimise returns and improve operational efficiency in managing the assets.
LIC CEO and MD R Doraiswamy highlighted that the company has substantial real estate holdings accumulated over 70 years, which serve both operational and investment purposes. Each property is assessed for its contribution to overall returns, balancing benefits for policyholders and shareholders.
The review will cover both self-occupied and income-generating properties, with a focus on improving branch ambience and enhancing operational effectiveness. Doraiswamy emphasised that the objective is to increase yields, improve efficiency, and strategically manage assets to strengthen LIC’s overall profitability while maintaining a positive image for the corporation.
HDFC Life maintains near-perfect claim settlement
HDFC Life Insurance reported a claim settlement ratio of 99.7 per cent for individual death claims in FY26, reinforcing its commitment to timely and hassle-free payouts. The company has invested in digital workflows, automation, and AI-driven analytics to streamline claims processing.
Claimants can now initiate and track claims online, upload documents digitally, and receive regular updates on claim status. These improvements reduce reliance on physical visits and manual paperwork, making the claims process faster and more efficient.
Under Project Inspire, HDFC Life has introduced Zero-Touch Processing (ZTP), FastTrack processes, and real-time payment enablement to further improve customer experience. The insurer continues to prioritise smooth claim handling across multiple channels, including branch offices, agents, and online portals, ensuring policyholders are supported throughout the claims journey while reducing operational challenges.
Life insurers’ new business premium dips to 10-month low
Life insurance new business premium (NBP) growth slowed to 5.15 per cent year-on-year in May, marking the weakest increase since August of the previous year. Both public and private sector insurers saw muted growth, largely due to weak performance in group insurance premiums.
Despite strong industry expansion over the past year, aided by the GST exemption on life insurance products, May’s slowdown reflects subdued demand in large corporate and group segments. Data from the Life Insurance Council shows LIC recorded a 3.46 per cent increase in NBP to Rs. 19,042.16 crore, while private insurers posted a 7.72 per cent rise to Rs. 12,988.68 crore.
Industry experts suggest that sustained focus on individual retail policies, product innovation, and digital distribution may help offset the group segment slowdown, ensuring a balanced and stable growth trajectory for the life insurance sector in the upcoming months.
ICICI Pru Life launches ULIP with guaranteed maturity benefit
ICICI Prudential Life Insurance has introduced ICICI Pru Signature Secure, the industry’s first unit-linked insurance plan (ULIP) with an in-built guaranteed maturity benefit. The product is designed for customers seeking a combination of tax-efficient investment growth and assured returns.
The plan offers a simple proposition: invest once, receive a guaranteed maturity amount at the end of five years, and enjoy life cover during the policy term. For example, a 45-year-old investing Rs. 5 lakh can secure a sum assured of Rs. 6.25 lakh with a guaranteed maturity benefit of Rs. 7 lakh. The policy provides flexibility and financial security for individuals seeking predictable returns.
Vikas Gupta, Chief Product Officer, ICICI Prudential, noted that customers increasingly prefer instruments offering post-tax efficiency alongside guaranteed benefits. The plan also features zero premium allocation charges and no policy administration fees, enhancing its attractiveness. ICICI Prudential Life maintained a claim settlement ratio of 99.3 per cent in FY26, highlighting its robust claims framework.
Insurance premium financing gains momentum after GST waiver
The demand for insurance premium financing has surged following the Goods and Services Tax (GST) exemption on individual life and health insurance policies, according to Hanut Mehta, CEO of BimaPay Finsure. The waiver has boosted insurance uptake, particularly in the retail health segment, which now accounts for nearly 85% of the premium financing business.
BimaPay Finsure, a fintech facilitating credit for insurance payments, recorded a four-fold increase in annual premium disbursements, rising from Rs. 250-300 crore in FY25 to Rs. 1,200 crore in FY26. Its Assets Under Management (AUM) also expanded from Rs. 220 crore to Rs. 650 crore during the same period, with 85-90% growth attributed to retail health policies.
The company has scaled its partnerships to include eight general and health insurers and two life insurers, enabling broader adoption of long-tenure and multi-year insurance policies. The growth is attributed to enhanced distribution, onboarding of new insurers, and increased awareness among agents and sales managers.
Finance Minister urges insurers to speed up policyholder services
Union Finance Minister Nirmala Sitharaman has urged insurance companies to enhance their service delivery and provide faster, more efficient support to policyholders, underscoring the government’s focus on customer-centric financial services. She called for improvements in claim settlement timelines, transparent communication, and a seamless overall customer experience.
The Minister emphasised that as insurance penetration grows across India, insurers must strengthen service standards to meet evolving expectations. Customer trust, she said, is central to industry growth, and faster processing of claims, simplified procedures, and effective grievance redressal can significantly boost confidence in insurance products while supporting broader financial inclusion goals.
Experts noted that digital transformation, Artificial Intelligence, and data analytics offer insurers opportunities to streamline operations and enhance service quality. They cautioned that technology adoption must be accompanied by strong governance and accountability. The remarks align with IRDAI’s ongoing initiatives to reinforce policyholder protection, improve market conduct, and ensure efficient customer support.
Policybazaar and Ageas Federal tie up to boost digital insurance sales
Policybazaar has entered a strategic partnership with Ageas Federal Life Insurance to strengthen the online distribution of life insurance products and improve digital accessibility for customers nationwide. The collaboration will allow Ageas Federal’s offerings to be available through Policybazaar’s platform, enabling customers to compare, evaluate, and purchase products via a streamlined online process.
The alliance reflects the growing importance of digital distribution in India, where technology-driven platforms simplify product discovery, enhance transparency, and offer greater convenience. Such marketplaces have become key channels for insurers seeking to reach digitally savvy consumers and expand insurance penetration.
Analysts expect the partnership to help Ageas Federal boost its digital presence while allowing Policybazaar to diversify its insurance solutions. Rising consumer adoption of online financial services, increased awareness of insurance benefits, and demand for personalised protection are expected to drive further innovation in the sector. This collaboration highlights the convergence of technology and insurance in shaping customer-centric distribution.
West Bengal Gramin Bank Partners with Canara HSBC Life to Boost Rural Insurance
West Bengal Gramin Bank has partnered with Canara HSBC Life Insurance to expand insurance access in rural areas. The collaboration leverages the bank’s extensive rural network to distribute life insurance products while Canara HSBC provides claims management and product expertise.
Policyholders in remote regions can now access simplified enrolment processes, financial literacy guidance, and risk protection. Officials believe the initiative will enhance insurance awareness, improve coverage among underserved populations, and promote financial inclusion in rural communities.
Industry experts noted that such bancassurance partnerships are critical for expanding insurance penetration in low-access regions. By combining banking reach with insurance capabilities, the partnership enhances convenience and builds trust while providing a foundation for socio-economic development. The initiative is expected to accelerate rural insurance adoption and create sustainable growth opportunities for both institutions.
