Trade Analytics
Insurance
The total market size of the insurance sector in India is projected to touch US$ 350-400 billion by 2020.

Indian Insurance Industry Analysis

Latest update: December, 2016

LIC Continues to Dominate Life Insurance Segment

  • As of 2016, life insurance sector has 29 private players in comparison to only four in FY02
  • With 70.4 per cent share market share in FY16, LIC continues to be the market leader, followed by SBI (5.1 per cent), ICICI (4.9 per cent) and HDFC (4.1 per cent)

Life Insurance Market Appears Vibrant

  • The life insurance market grew from US$ 10.5 billion in FY02 to US$ 27.5 billion in FY16
  • Over FY02–FY16, life insurance premiums expanded at a CAGR of 7.5 per cent.
  • The life insurance industry has the potential to grow 2-2.5 times by 2020 in spite of multiple challenges supported by long-term trends and fundamentals underlying household savings.

 

Last Updated: December, 2016

Post liberalisation, the insurance industry in India has recorded significant growth. The Indian insurance industry is expected to grow to US$ 280 billion by FY2020, owing to the solid economic growth and higher personal disposable incomes in the country.

There are 24 life insurance and 28 non-life insurance companies in the Indian market who compete on price and services to attract customers. The industry has been spurred by product innovation, vibrant distribution channels, coupled with targeted publicity and promotional campaigns by the insurers.

Government has approved the ordinance to increase Foreign Direct Investment (FDI) limit in Insurance sector from 26 per cent to 49 per cent which would further help attract investments in the sector.

The Insurance Regulatory and Development Authority (IRDA) recently allowed life insurance companies that have completed 10 years of operations to raise capital through Initial Public Offerings (IPOs). Insurance products are also covered under the Exempt‑Exempt‑Exempt (EEE) method of taxation, which translates to an effective tax benefit of approximately 30 per cent on select investments. In 2015, Government introduced Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJBY) to bring more people under the insurance cover.

Going forward, increasing life expectancy, favourable savings and greater employment in the private sector is expected to fuel demand for pension plans. Likewise, strong growth in the automotive industry over the next decade would be a key driver for the motor insurance market.

During the first half of FY 2016-17 the Life Insurance industry reported a 20 per cent growth in overall annualised premium equivalent with the help of both private players and Life Insurance Corporation.

Sectoral Presentation (December, 2016)

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