Financial performance of public sector and private sector insurance companies in India: An analytical study

This study provides a comprehensive comparative analysis of the financial performance of public and private sector insurance companies in India, focusing on five major public insurers-Life Insurance Corporation of India, New India Assurance Company Limited, National Insurance Company Limited, Oriental Insurance Company Limited, and United India Insurance Company Limited-and five leading private insurers-Bajaj Allianz Life, Birla Sun Life, Reliance Life, ICICI Lombard General, and TATA AIG General. The primary objective was to evaluate differences in profitability, solvency, operational efficiency, investment performance, and premium growth between the two groups. Secondary data were collected from Insurance Regulatory and Development Authority of India (IRDAI) annual reports for the period 2018-2023. Using descriptive statistics and independent sample t-tests in SPSS 28, the study examined key ratios including return on net worth, solvency margins, claim settlement ratios, investment yields, and premium growth rates. Findings revealed that private insurers consistently outperformed public counterparts in profitability, solvency, and premium growth, owing to leaner structures, innovation, and aggressive market expansion. Conversely, public insurers demonstrated superiority in claim settlement and investment yield, reflecting their emphasis on customer trust and long-term stability. The results suggest complementary strengths across both segments, with private firms driving efficiency and growth while public firms provide reliability and inclusivity. The implications are significant for regulators, policymakers, and industry leaders, highlighting the need to leverage these strengths in shaping balanced, sustainable strategies for the future of India’s insurance sector.