Snapshot

Insuring India

Insurance market in India is expected to grow to $250 bn by 2025

The Insurance market consists of the non-life insurance sector and the life insurance sector.

Overall, the Indian insurance market had total gross written premiums of $ 96.9 bn in 2017, representing a CAGR of 12.3% between 2013 and 2017. The CAGR of the market during 2017–22 is predicted to be 4.9%. India accounts for 6.1% of the Asia-Pacific insurance market value.

The Indian Life insurance market grew by 13.2% in 2017 to reach a value of $ 92.1 bn, it is expected to account for 35% of India's total savings by 2020. India accounts for 6.8% of the Asia-Pacific life insurance market value. Whereas, the Indian non-life insurance market grew by 21.6% in 2017 to reach a value of $ 24.5 bn. 

Indian life insurance market can be categorised into two sub-segments namely, Life insurance which contributed to 69.3% and Pension/ annuity which contributed to 30.7% of the total market share by value.

LIC is the leading player in the Indian life insurance market, generating a 78% share of the market's value. Whereas, Motor is the largest segment of the non-life insurance market in India, accounting for 63% of the market's total value. 

The Indian life insurance market had total gross written premiums of $ 72.4 bn in 2017, representing a CAGR of 10.4% between 2013 and 2017, while the Indian non-life insurance market had total gross written premiums of $ 24.5bn in 2017, representing CAGR of 18.8% between 2013 and 2017.

The motor segment was the market's most lucrative in 2017, with total gross written premiums of $ 15.4 bn, equivalent to 63% of the market's overall value. The property segment contributed gross written premiums of $ 3.7 bn in 2017, equating to 15.3% of the market's aggregate value.

Motor insurance has been compulsory in India since 1988. According to the reports, the number of new cars sold annually increased with a CAGR of 6% between 2013 and 2017, to reach a total of 3.2 mn in 2017. Cars are one of the major transportation methods in India, making it one of the largest segments. 

The market share of private sector companies in the non-life insurance market rose from 13.12% in FY03 to 54.72% in FY19 (up to Feb 2019).

LIC contributed to 71% while Private life insurers contributed to 29% of the total market share up to 31 October 2018.

Furthermore, LIC contributed to 73% (1,387,893 policies) while Private life insurers contributed to 27% (516,129 policies) of the total market share of the number of policies issued during October 2018.

  • By 2025, the Insurance market in India is expected to grow to 250 bn dollars; currently, the it is growing at the rate of more than 12%
  • By 2022, the Indian life insurance market is forecast to have a value of $92.1 bn, an increase of 27.2% since 2017 
  • By 2022, the Indian non-life insurance market is forecast to have a value of $38.7 bn, an increase of 58% since 2017

Upto 49% of the FDI is allowed under the automatic route.

For further details, please refer to FDI policy

  • $ bn

    Insurance market value

  • $ bn

    Life insurance market value

  • $ bn

    Non-life insurance market value

  • %

    Share in Asia Pacific insurance market value

A

Ayushman Bharat - National Health Protection Mission (AB-NHPM) is the largest health scheme by the GoI.

B

India is the 10th largest Life Insurance market globally

C

India is the 15th largest Non-Life Insurance market globally

Industry Scenario

The Indian Insurance industry is expected to reach $ 280 bn by 2020

The Insurance industry in India has seen major growth in the last decade. It is governed by the Insurance Regulatory and Development Authority of India (IRDAI). The industry consists of 63 insurance companies (24 Life insurers and 39 non-life insurers).

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.

Private health insurance penetration in India is approximately 5-10%.

Currently, there are seven health insurance and 23 general insurance companies providing health insurance products in India.

Health insurance contributes 20% to the non-life insurance business, making it the 2nd largest portfolio. By the end of the financial year 2017-18, the premium amount in the sector increased to INR 37,000 cr compared to INR 741 cr in the financial year 2001-02, growing at a CAGR of 20-25% YoY.

GROWTH DRIVERS

  • Increasing demand

    Increase in working population will raise the demand for banking and related services

  • Strong economy

    India is the fastest-growing largest economy in the world

  • Govt. programs to increase insurance cover

    Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Ayushman Bharat etc

  • Strong growth in automotive industry

    The motor insurance industry is expected to boost

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FAQ

Frequently
Asked Questions

What is Health insurance?

The term health insurance is a type of insurance that covers your medical expenses. A health insurance policy is a contract between an insurer and an individual /group in which the insurer agrees to provide specified health insurance cover at a particular “premium”.

What are the factors that affect Health Insurance premium?

Age is a major factor that determines the premium, the older you are the premium cost will be higher because you are more prone to illnesses. Previous medical history is another major factor that determines the premium. If no prior medical history exists, the premium will automatically be lower.  Claim free years can also be a factor in determining the cost of the premium as it might benefit you with a certain percentage of the discount. This will automatically help you reduce your premium.

Whether insurance policies issued to Non-Resident Indians, where the premium is paid through the Non Resident External Bank account, will be ‘export of services’?

No. The amounts paid from the Non-Resident External Accounts are paid in Indian Rupees and are not received in convertible foreign exchange. Therefore, the conditions for export of services as provided under section 2(6) of IGST Act, 2017 are not satisfied. Life Insurance services in such cases would be treated as inter-State supplies and subject to GST.

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