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: May, 2018

Growth
  • Over the years, share of private sector in life insurance segment has grown from around 2 per cent in FY03 to 29.69 per cent in FY18*.

Notes: Figures are as per latest data available, E- estimated, based on first year premium collection, * up to February 2018
Source: IRDA, Aranca Research

  • As of February 2018, life insurance sector had 23 private players in comparison to only 4 in FY02.
  • With 70.31 per cent share market share in FY18*, LIC continues to be the market leader, followed by HDFC Standard Life at 5.65 per cent.
Growth

Notes: * up to February 2018
Source: Aranca Research, IRDA

Last Updated: May, 2018

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. Overall insurance penetration in India reached 3.49 per cent in FY17 from 2.71 per cent in 2001. Gross premium in Indian insurance industry increased from Rs 3.2 trillion (US$ 49 billion) in FY12 to Rs 5.5 trillion (US$ 84.7 billion) in FY17 and reached Rs 4.6 trillion (US$72 billion) in FY18 (up to December 2017). The domestic life insurance industry registered 10.99 per cent y-o-y growth for new business premium in 2017-18, generating a revenue of Rs 1.94 trillion (US$ 30.1 billion). Gross direct premiums of non-life insurers in India reached Rs 1.51 trillion (US$ 23.38 billion) in FY18. Over FY12-18, non-life insurance premiums (in Rs) increased at a CAGR of 16.65 per cent.

There are 24 life insurance and 33 non-life insurance companies in the Indian market who compete on price and services to attract customers. There are two reinsurance companies. The industry has been spurred by product innovation, vibrant distribution channels, coupled with targeted publicity and promotional campaigns by the insurers. Private sector companies hold 48.01 per cent market share in the general insurance segment and 28.93 per cent market share in the life insurance segment.

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 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth US$ 903 million. Enrolments under the Pradhan Mantri Suraksha Bima Yojana (PMSBY) reached 130.41 million in 2017-18. National National Health Protection Scheme was announced under Budget 2018-19 as a part of Ayushman Bharat. The scheme will provide insurance cover of up to Rs 500,000 (US$ 7,723) to more than 100 million vulnerable families in India.

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.

Indian Insurance Industry Report (May, 2018)

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Indian Insurance Industry Report (April, 2018)

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Click to access the Insurance Industry Archived Report

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