Insurance
India's insurance industry is expected to reach US$ 280 billion by 2020.

Indian Insurance Industry Analysis

Latest update: September, 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: September, 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 3.69 per cent in 2017 from 2.71 per cent in 2001. Gross premiums written in India reached Rs 5.53 trillion (US$ 94.48 billion) in FY18, with Rs 4.58 trillion (US$ 71.1 billion) from life insurance and Rs 1.51 trillion (US$ 23.38 billion) from non-life insurance.

Over FY12–18, premium from new business of life insurance companies in India have increased at a 14.44 per cent CAGR to reach Rs 1.94 trillion (US$ 30.1 billion) and non-life insurance premiums (in Rs) increased at a CAGR of 16.65 per cent. In FY19 (up to August 2018), premium from new life insurance business increased 6.20 per cent year-on-year to Rs 755.88 billion (US$ 11.28 billion). In FY19 (up to July 2018), gross direct premiums of non-life insurers reached Rs 49,067.47 crore (US$ 7.32 billion), showing a year-on-year growth rate of 13.91 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. The market share of private sector companies in the non-life insurance market rose from 13.12 per cent in FY03 to 51.07 per cent in FY19 (up to July 2018). In life insurance segment, private players had a market share of 30.3 per cent in new business in FY19 (up to August 2018).

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.

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 (September, 2018)

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Indian Insurance Industry Report (July, 2018)

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