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

Indian Insurance Industry Overview & Market Development Analysis

Latest update: October, 2018

Growth

 

Last Updated: December, 2018

Introduction

The insurance industry of India consists of 57 insurance companies of which 24 are in life insurance business and 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that, among the non-life insurers there are six public sector insurers. In addition to these, there is sole national re-insurer, namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian Insurance market include agents (individual and corporate), brokers, surveyors and third party administrators servicing health insurance claims.

Market Size

Government's policy of insuring the uninsured has gradually pushed insurance penetration in the country and proliferation of insurance schemes.

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. Overall insurance penetration (premiums as % of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001.

In FY19 (up to October 2018), premium from new life insurance business increased 3.66 per cent year-on-year to Rs 1.09 trillion (US$ 15.46 billion). In FY19 (up to October 2018), gross direct premiums of non-life insurers reached Rs 962.05 billion (US$ 13.71 billion), showing a year-on-year growth rate of 12.40 per cent.

Investments and Recent Developments

The following are some of the major investments and developments in the Indian insurance sector.

  • As of November 2018, HDFC Ergo is in advanced talks to acquire Apollo Munich Health Insurance at a valuation of around Rs 2,600 crore (US$ 370.05 million).
  • In October 2018, Indian e-commerce major Flipkart entered the insurance space in partnership with Bajaj Allianz to offer mobile insurance.
  • In August 2018, a consortium of WestBridge Capital, billionaire investor Mr Rakesh Jhunjunwala announced that it would acquire India’s largest health insurer Star Health and Allied Insurance in a deal estimated at around US$ 1 billion.
  • In September 2018, HDFC Ergo launched ‘E@Secure’ a cyber insurance policy for individuals.
  • Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7 billion) through public issues in 2017.
  • In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth US$ 903 million.
  • India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with Ebix Inc to build a robust insurance distribution network in the country through a new distribution exchange platform.

Government Initiatives

The Government of India has taken a number of initiatives to boost the insurance industry. Some of them are as follows:

  • In September 2018, National Health Protection Scheme was launched under Ayushman Bharat to provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million vulnerable families. The scheme is expected to increase penetration of health insurance in India from 34 per cent to 50 per cent.
  • Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2017-18.
  • The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue redesigned initial public offering (IPO) guidelines for insurance companies in India, which are to looking to divest equity through the IPO route.
  • IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds that are issued by banks to augment their tier 1 capital, in order to expand the pool of eligible investors for the banks.

Road Ahead

The future looks promising for the life insurance industry with several changes in regulatory framework which will lead to further change in the way the industry conducts its business and engages with its customers.

The overall insurance industry is expected to reach US$ 280 billion by 2020. Life insurance industry in the country is expected grow by 12-15 per cent annually for the next three to five years.

Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance.

Exchange Rate Used: INR 1 = US$ 0.0149 as on June 29, 2018

References: Media Reports, Press Releases, Press Information Bureau, Union Budget 2017-18, Insurance Regulatory and Development Authority of India (IRDA), Crisil

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Posters

Brand India Pharma

INSURANCE COMPANIES IN INDIA

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

Indian Connected consumer

English

+ More Publications >

IBEF Publication

IBEF Blog - INDIA ADDA – PERSPECTIVES ON INDIA More

author_logo-ibef1.jpg Mobile Phone Manufacturing in India: Towards A Brighter Future!
IBEF, Knowledge Centre

India is the world’s second largest mobile phone manufacturer after China. And with the current pace of growth, India is not far from becoming the leading handset m...

author_logo-ibef1.jpg Solar energy generation in India: Lighting lives!
IBEF, Knowledge Centre

The generation of power from solely renewable sources like solar energy is a prime focus of India’s energy planning. Started in the early 1970s, the process of crea...

author_logo-ibef1.jpg Digital payment industry in India
IBEF, Knowledge Centre

From being primarily a cash-obsessed economy, India’s digital payment story is new but exciting. Driven by progressive regulatory policies and increased use of mobi...

author_logo-ibef1.jpg The Indian Hotel Industry, Sunshine Ahead
IBEF, Knowledge Centre

Ever expanding domestic tourism, increasing foreign tourist arrivals, forex earnings growth, high airline passenger numbers and muted supply growth has put the Indian hot...

author_logo-ibef1.jpg Generic Medicines and Vaccines: India's Pharma Exports and the Role It Plays
IBEF, Knowledge Centre

In any country, research and studies pertaining to medicines tend to be expensive. That is why companies researching new medicines tend to pass on these costs to consumer...

author_logo-ibef1.jpg Changing mobile internet landscape in India
IBEF, Knowledge Centre

About forty years have passed since the inception of the internet. Today, mobile internet services are a pre-determined requisite, at least for urban Indians. What starte...

ideas More

Ideas

Zomato: Top Of The Food Chain
Zomato, an Indian start-up is in the business of online food ordering. It initially launched Foodiebay.com in Gurugram in 2008, a website that scanned menus and provided ratings and recommendations on restaurants. It soon expanded to cities like Kolkata, Mumbai, Pune and Bengaluru and renamed itself as Zomato in 2010. Presently the food....

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password