The insurance industry of India has 57 insurance companies -24 are in the life insurance business, while 33 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. There are six public sector insurers in the non-life insurance segment. In addition to these, there is a sole national re-insurer, namely General Insurance Corporation of India (GIC Re). Other stakeholders in the Indian Insurance market include agents (individual and corporate), brokers, surveyors and third-party administrators servicing health insurance claims.
In India, the overall market size of the insurance sector is expected to US$ 280 billion in 2020.
Government's policy of insuring the uninsured has gradually pushed insurance penetration in the country and proliferation of insurance schemes.
Gross premium collected by life insurance companies in India increased from Rs. 2.56 trillion (US$ 39.7 billion) in FY12 to Rs. 7.31 trillion (US$ 94.7 billion) in FY20. During FY12-FY20, premium from new business of life insurance companies in India increased at a CAGR of 15% to reach Rs. 2.13 trillion (US$ 37 billion) in FY20.
Overall insurance penetration (premiums as% of GDP) in India reached 3.71% in FY19 from 2.71% in FY02.
Life insurers reported 14% YoY growth in individual annualised premium equivalent (APE) in October 2020, compared with 4% YoY in September 2020.
The market share of private sector companies in the non-life insurance market rose from 15% in FY04 to 56% in FY21 (till April 2020). In life insurance segment, private players had a market share of 31.3% in new business in FY20.
Investments and Recent Developments
The following are some of the major investments and developments in the Indian insurance sector.
The Government of India has taken number of initiatives to boost the insurance industry. Some of them are as follows:
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 the end of 2020. Life insurance industry in the country is expected to increase by 14-15% annually for the next three to five years.
The scope of IoT in Indian insurance market continues to go beyond telematics and customer risk assessment. Currently, there are 110+ InsurTech start-ups operating in India.
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.
Note: Conversion rate used in April 2020, Rs. 1 = US$ 0.013123
References: Media Reports, Press Releases, Press Information Bureau, Union Budget 2019-20, 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.
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