InsureTech platform Probus says Once considered peripheral markets, smaller towns are rapidly emerging as the real growth engines of Digital Bharat
MUMBAI, June 11 (The CONNECT)- Tier-III cities and beyond now contribute nearly 62% of total new insurance business in the current fiscal year, signalling a dramatic decentralisation of India’s insurance growth story, says a study.
Once considered peripheral markets, smaller towns are rapidly emerging as the real growth engines of Digital Bharat, a transformation propelled by the success of UPI, expanding digital payment infrastructure, and deepening internet penetration, shows the study by Probus, one of India’s leading InsurTech and insurance broking firms.
Most UPI transactions now originate from non-metro regions, indicating a high level of digital adoption and financial participation.
Probus notes that this is not a temporary or seasonal trend, but a consistent pattern of growth observed over the past three consecutive fiscal years – rising from 58% to 62%, reflecting a sustained upward momentum.
In FY2024-25 alone, the Motor Insurance segment registered the highest growth at 25.6%, fuelled by digital accessibility, and a strengthened PoSP (Point-of-Sale Person) network.
Local distribution models, especially those built on app-based onboarding, regional language interfaces, and education-first selling, have played a key role in bringing insurance products closer to underserved consumers. What was once a passive, compliance-driven purchase is now increasingly seen as a proactive financial planning tool in Tier-III cities and beyond.
The report also highlights strong momentum across insurance verticals for FY 2024-25 compared to FY 2023-24, with life insurance premiums growing by over 60% in fresh policies. Non-life insurance premiums, led by motor, health, and SME segments, showed significant growth, with SME insurance emerged as the fastest-growing segment in FY 2024-25, registering a 112% increase.
Rakesh Goyal, Director, Probus, said, at global level, the Indian economy has shown remarkable resilience despite external headwinds. A key reason behind this strength is the steady rise of Tier-II and Tier-III cities, and our latest data confirms that.
The company’s robust PoSP network continues to be the vital bridge connecting underserved markets to comprehensive insurance solutions, driving Probus’s mission to empower every corner of India with financial security.
