Rural and semi-urban districts across India are generating nearly half of all new life and health insurance premiums sold through digital platforms, according to a new study by Policybazaar.

The study, which analysed fresh premium data from FY23 to FY25 across life, health, and motor insurance, found that districts where more than half of residents live in rural areas - as classified by the 2011 Census - contributed 43% of all new life and health premiums in FY25, up from 41% in FY23.

Cities with populations below 10 lakh accounted for 47% of new life and health premiums in FY25, rising from 44% in FY23. The 1–5 lakh population band recorded the sharpest climb, from 26% to 29%, which the report described as a meaningful shift in the buyer base.

Motor insurance data told a parallel story. Rural-majority districts held a steady 36% share of new motor premiums across all three years, a figure Policybazaar said reflected durable market reach rather than a short-term trend. Cities with populations below 10 lakh contributed 44%–47% of motor premiums over the same period.

Within the rural breakdown, deeply rural districts - those with 70% or more rural population - held a consistent 23%–24% share of life and health premiums and 15% of motor premiums. The 50-70% rural band, representing peri-urban and semi-rural areas, grew from 18% to 19% in life and health over the same period.

Policybazaar said the findings challenge the long-held assumption that digital financial products primarily serve urban consumers.

Sarbvir Singh, joint Group CEO of PB Fintech, said in a statement that the data pointed to broader structural changes. “Bharat is leading India’s insurance growth, both in scale and in behaviour,” Singh said. “The gap between urban and rural insurance penetration is slowly closing. Our goal now is to build for this customer—simpler products, stronger service, and a claims experience that reinforces trust.”

The report noted that motor insurance may be serving as a gateway product, with digital buyers - particularly two-wheeler owners - increasingly adopting life and health coverage thereafter.

All figures in the study reflect fresh premiums transacted on the Policybazaar platform.