India is set to become one of the fastest growing insurance markets: Economic Survey
As per the Economic Survey of 2022-2023, India is poised to emerge as one of the fastest-growing insurance markets in the coming decades. This would be only possible with the help of government intervention and a conducive regulatory environment which has given rise to product innovations and vibrant distribution channels.
In 2021, India became the world’s tenth-largest insurance market in terms of premiums and was also named the second largest among emerging market economies, as per a Swiss Report. By 2032, it will emerge as one of the top six insurance markets ahead of Germany, Canada, Italy, and South Korea.
The insurance penetration in the country rose from 2.7% to 4.2 % in 2021 which is almost twice more than the emerging markets and slightly above the global average. Further, the insurance density in the country has increased from US$ 11 in 2001 to US$ 91 in 2021 resulting in a faster expansion of the insurance market in the country.
The chairman of the Insurance Regulatory Authority of India (IRDAI), Mr. Debasish Panda in a recent address said that the insurance sector would require a capital infusion of around US$ 6.12 billion (Rs. 50,000 crores) which would double the insurance penetration in about 5-7 years. He pitched to the individual investors present in the country to invest in the insurance sector with the given return on equity to be at 20%.
The insurance sector is already witnessing multiple mergers and acquisitions activity. The additional Foreign direct investment inflows, initial public offers, simplified rules and regulations, and improved corporate valuations which would further accelerate the mergers and acquisitions activities in the sector.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.