Policybazaar Reports 3.8X Surge in First-Time Health Insurance Buyers Since FY22
MUMBAI: First-time health insurance buyers on Policybazaar surged by 277% to nearly 1.8 million between FY22 and FY26, with 67% of new customers hailing from Tier 2 and Tier 3 cities. This trend indicates a significant shift in insurance adoption beyond metropolitan areas, as buyers increasingly opt for higher coverage.
The growth in first-time buyers was steady over the years, with increases of 5% in FY23, 40% in FY24, 67% in FY25, and 54% in FY26. This data aligns with the Insurance Regulatory and Development Authority of India’s (IRDAI) efforts to expand coverage to the “missing middle,” a demographic that remains largely uninsured. Notably, first-time buyers from smaller cities grew by 351% during this period, raising their share of new buyers from 56% in FY22 to 67% in FY26.
Regional Growth Patterns
Cities in Kerala exhibited some of the highest growth rates in first-time health insurance purchases. Malappuram saw a year-on-year increase of 128.34%, followed by Kottayam at 122.66%, Alappuzha at 120.76%, Thiruvananthapuram at 114.74%, and Palakkad at 113.63%. Other cities like Nagpur and Coimbatore recorded growth rates of 53.33% and 57.40%, respectively.
Demographically, individuals aged 26 to 35 comprised 27.66% of first-time buyers, while those aged 36 to 45 accounted for 21.98%. Together, these age groups represented nearly half of all new buyers. In contrast, only 7.36% of policies were purchased by families with an eldest member over 65. The gender gap in health insurance adoption remains significant, with men making up 82.81% of first-time buyers and women only 17.19%.
Increasing Coverage Amounts
The average sum insured for first-time buyers doubled from Rs 6.3 lakh in FY22 to Rs 13.1 lakh in FY26. In FY26, 68% of first-time policies provided coverage of Rs 10 lakh or more, compared to just 32% in FY22. The most common choice was a Rs 10 lakh cover, which accounted for 51% of policies. The data also noted a rise in coverage levels following the removal of GST in September 2025.
Sarbvir Singh, joint group CEO of PB Fintech, the parent company of Policybazaar, emphasized the importance of attracting new customers, particularly from smaller cities. He noted that an increasing number of individuals are purchasing their first health policy, often opting for larger coverage than in previous years. Singh acknowledged the challenges first-time buyers face in understanding their policies and navigating claims, stating, “Our job is to take them to a policy they understand, and then stand by them at the time of claim.”
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