FM Nirmala Sitharaman asks public sector general insurance companies to widen reach

New Delhi: Finance minister Nirmala Sitharaman on Wednesday asked public sector general insurance companies, or PSGICs, to work towards improving both penetration and density to ensure wider financial protection.

Sitharaman reviewed the performance of PSGICs and emphasised the urgent need for digital transformation to improve service delivery and efficiency. The total premium collected by PSGICs has witnessed a significant rise from around ₹80,000 crore in 2019 to nearly ₹1.06 lakh crore in 2025.

General insurance penetration in India remains relatively low at 1% of GDP-compared to a global average of 4.2% in 2023-but insurance density has steadily improved, increasing from $19 in 2019 to $25 in 2023.

In a statement the finance ministry noted that PSGICs have witnessed a significant turnaround, with all of them having become profitable again. The finance minister further directed the companies to develop innovative insurance products tailored to new and emerging risks, including cyber fraud, and to diversify their product portfolio in line with evolving consumer needs, it said.

"The importance of robust underwriting practices and portfolio optimisation was also highlighted, with instructions to align combined ratios with global industry benchmarks to safeguard profitability and financial stability," the statement said.

Sitharaman asked PSGICs to promptly address customer grievances, strengthen social media engagement, and ensure seamless integration with the Account Aggregator system.