The life insurance market in India is projected to grow at a rate of 10.5% annually over the next decade, significantly outpacing the global average of 5%, according to a report by Allianz Global Insurance. This growth is driven by expanding economic activity in India and supportive government policies promoting insurance uptake. The report highlights that while China (+7.8% per annum) will remain the largest market in Asia in absolute terms, India is expected to be the fastest-growing market, eventually surpassing Japan to become the second largest in the region. Asia overall will contribute more than half of the additional premium pool globally, led by China, North America, and Europe.
To capitalise on this growth, India has increased the Foreign Direct Investment (FDI) limit in insurance to 100%, up from 74%. The government also infused Rs. 17,450 crore (US$ 2.04 billion) into Public Sector General Insurance Companies (PSGICs) between 2019-20 and 2021-22 to support reforms, improve efficiency, and drive profitability. This has led to a major turnaround, with all PSGICs becoming profitable in the previous fiscal year after years of losses. The Property and Casualty (P&C) insurance segment is expected to grow at a rate of 4.5% annually until 2035, reflecting rising global demand for protection. Additionally, higher interest rates are expected to support the growth of the life insurance sector at a compound annual growth rate (CAGR) of around 5% over the next decade, particularly benefiting developed markets in Western and North America. The Government of India remains committed to strengthening PSGICs through reforms and performance monitoring to enhance competitiveness.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
