Public Insurers Face Profit Push, Youth Focus, Digital Mandate
Overview
India's Department of Financial Services has directed public sector insurers, including LIC and GIC, to prioritize profitability and lower loss ratios. The directive, issued January 13, 2026, emphasizes designing innovative products for younger demographics and accelerating digital transformation to achieve 100% digital onboarding for retail products.
Insurers Tasked with Profitability and Digital Push
The Department of Financial Services (DFS) convened a critical review on January 13, 2026, examining the financial health and strategic direction of India's public sector insurance companies. The meeting zeroed in on performance metrics for Fiscal Year 2024-25 and the first half of FY 2025-26, with a sharp focus on profitability, customer-centric reforms, and the imperative of digital adoption.
Chaired by DFS Secretary M. Nagaraju, the session included top brass from Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), New India Assurance Co. Ltd (NIACL), National Insurance Co. Ltd (NICL), United India Insurance Co. Ltd (UIICL), Oriental Insurance Co. Ltd (OICL), and Agriculture Insurance Company of India Ltd (AICIL). The directive was clear: public insurers must elevate profitable business lines while aggressively working to reduce loss ratios, all while safeguarding their existing market share and fortifying their retail portfolios.
Innovating for a New Generation
Secretary Nagaraju stressed the need for product innovation, calling for the design of customized policies that cater specifically to younger customers and address the complexities of emerging risks. This strategic pivot aims to capture a growing demographic and future-proof the sector against evolving market dynamics. Alongside product development, a significant push towards technological integration was highlighted, setting an ambitious objective of achieving 100% digital onboarding for all retail insurance products.
Enhancing Visibility and Service
Efforts to bolster brand visibility across all platforms, including social media, were also a key discussion point. Improved communication and targeted publicity campaigns are expected to enhance outreach. The DFS acknowledged specific successes, noting LIC's progress toward sustained profitability and the successful nationwide expansion of its Bima Sakhi initiative, particularly in rural and semi-urban areas. AICIL received commendation for surpassing the ₹10,000 crore premium milestone within the fiscal year.
Customer Grievances Take Center Stage
Underpinning these strategic directives is a paramount emphasis on customer service. Public sector insurers were instructed to prioritize the swift and efficient resolution of public grievances. Seamless and prompt claims processing was identified as a critical factor in delivering efficient services and maintaining customer trust. Senior executives present at the meeting included LIC CEO and MD R. Doraiswamy and NIACL CMD Girija Subramanian, among others.
