Ahmedabad: Interest in selling insurance policies of public sector banks is decreasing. As a result, life insurance policies sold by public sector banks through banking channels have declined in FY 2025 a year ago. This recession has come due to changes in incentive structure, as most public sector banks have now focused on core banking operations.
In contrast, life insurance companies connected to private sector banks have almost doubled their growth through banking channels during the same period.
According to industry estimates, the policy growth of life insurance companies sold by public sector banks slowed down to 6% in FY 2025 and slower to 2% in March. The number of policies sold by public sector banks through banking channels in FY 24 was 7%.
Similarly, the policy of the policy of life insurance companies sold by private banks through banking channels increased by 15 percent in the last financial year, but it increased by only 7 percent in March. A year ago, the growth through banking channels was 8 percent.
The growth of insurance companies has slowed down due to the recession in the business of insurance policies sold through the banking channels of public sector banks. Sources in a private life insurance company gave this information. The main reason for this is the change in the incentive schemes and a change in the scorecard given to the bank employees for selling insurance.
In FY 2025, several public sector banks including Punjab National Bank, Canara Bank and Union Bank of India saw a low single digit growth in the sale of insurance policy through bank channels. At the same time, State Bank of India, Bank of Baroda and Bank of India recorded a double -digit increase.
