Insuring India

India’s insurance premium volume stands at $127 Bn as of 2021 (Life – 76%, Non-Life – 24%). Total insurance premium in India increased by 13.5% in 2021 as against a global average of 9%.

  • In terms of total premium volumes, it is 10th largest market globally and the 2nd largest of all emerging markets, with an estimated market share of 1.9%. It is expected that premiums will grow by an average 9% p.a. (in real terms) over the next decade. India is poised to emerge as one of the fastest-growing insurance markets in the coming decade.
  • India has 67 insurers of which 24 are life insurers, 26 are general insurers, 5 are stand-alone health insurers, and 12 are re-insurers (March 2022).
  • The insurance industry in India has witnessed an impressive growth rate over the last two decades driven by the greater private sector participation and an improvement in distribution capabilities, along with substantial improvements in operational efficiencies
  • Snapshot of key insurance metrics
    • Insurance density in India has increased from $11.1 in 2001 to $91 in 2021 (Life insurance- $69, Non life insurance – $22)
    • Insurance penetration in India has been steadily increasing (from 2.7% in 2000 to 4.2% in 2021)
    • The insurance penetration in the life insurance sector was 3.2% in 2021 -twice more than emerging markets and slightly above the global average
    • In FY 22, the gross direct premium of non-life insurers and life insurers witnessed a YoY growth of 10.8% and 10.2%, respectively
    • In FY23, the New Business Premium of the life insurance industry grew at 17.91% with private insurers accounting for 37% of the the NBP of ~$45 Bn. First Year Premium for Life Insurers (for quarter ending June'23) is $8.7 Bn, with private insurers accounting for 38.5%.
  • $ Bn

    Premium Volume : Life Insurance : 2021

  • $ Bn

    Premium Volume: Non Life Insurance : 2021

  • %

    Growth in New Business Premium (Life) in FY23

  • $

    New Business Premium (Life) in FY23

The Indian Insurance market is expected to reach $200 Bn by 2027

India is 9th largest Life Insurance Market globally

India is the 14th largest Non-Life Insurance market globally.

Ayushman Bharat PM-JAY is the largest health assurance scheme in the world and is funded by the Government.

Industry Scenario

India’s share in global life insurance market was 3.23% in 2021. The life insurance premium registered YoY growth of 10.2% in FY22, with new businesses contributing 45.5% of the total premiums received by the life insurers

  • India's share in global non-life insurance market was ~1% in 2021. The Indian non-life insurance sector recorded 11.3% growth during 2021 whereas the global non-life insurance premium had only 8.4%
  • The gross direct premium of non-Life insurers (within and outside India) registered YoY growth of 10.8%, primarily driven by health and motor segments. The net incurred claims of non-Life insurers stood at INR 1.4 Lakh Cr in FY22, primarily driven by rising per capita income, product innovations and customization, development of strong distribution channels, and rising financial literacy.
  • The insurance penetration of life insurance sector has gone up from 2.2% in FY 02 to 3.2% FY 22
  • The insurance penetration of non-life insurance sector has gone up from 0.5% in FY 02 to 1% FY 22
  • The life insurance density has gone up from $9.1 in FY 02 to $69 in FY 22
  • The non-life insurance density has gone up from $2.4 in FY 02 to $22 in FY 22
  • Life insurance industry recorded a total written premium income of $91 Bn (INR 6.93 Lakh Cr) in FY 22, registering growth of 10.2% over FY 21. The private sector insurers posted 17.4% growth in premium, LIC recorded 6.1% growth
  • In FY 22, new business and renewal premium accounted for 45.5% and 54.5% of the total premium received by life insurers, respectively
  • The traditional products registered a growth of 10.1% in FY 22, with premium of $77 Bn (INR 5.92 Lakh Cr).
  • Unit-linked products (ULIPs) registered a growth of 10.2% with increase in premium to $13 Bn (INR 1 Lakh Cr) in FY 22. The share of unit-linked products in total premium was 14.5%
  • In FY 22, the life insurance industry registered a growth of 3.5% in the number of new policies issued against FY 21
  • Non-life insurance industry underwrote total direct premium of ~$29 Bn (INR 2.21 Lakh Cr) in FY 22, registering a growth of 11% from FY 21
  • The Indian health insurance industry reported a growth of 26.3% in FY 22, making it the largest non-life insurance sub-segment with a market share of about 36%, followed by the motor segment at 32%
  • Fire and other segments also recorded positive growth of 7.1% and 1.1%, respectively in FY 22
  • The general and health insurers have issued 266 Mn policies in FY 22, reporting an increase of 7.7%
  • The number of insurance policies issued to women in the year 2021-22 is around 10 Mn which is 34.7% of 30 Mn total insurance policies as against a share of 33% in 2020-21
  • The total mortality protection gap in India stands at $16.5 Tn (as of 2019) with an estimated protection gap of 83% of total protection need. This offers a huge opportunity to life insurers with an estimated additional life premium opportunity of average $78.2 Bn annually over 2020-30

Regulatory Landscape

  • The insurance regulator IRDAI has also undertaken various initiatives towards boosting the insurance penetration, such as permitting insurers to conduct video-based KYC, launching standardized insurance products and allowing insurers to offer rewards for low-risk behaviour
  • IRDAI has taken up the mission of ‘Insurance for All’ by 2047 which is expected to lead to a significant increase in insurance penetration and would help in bolstering the ease of doing business and will aid in making the sector more investment-friendly
  • IRDAI has “engaged four mission-mode teams” to work on transition to a risk-based solvency regime from current regime of capital or factor-based solvency, with the aim of beginning the shift within two years
  • IRDAI has allowed PE funds to directly invest in insurers, allowed promoters to dilute up to 26% stake & dispensed with its approval for raising capital such as subordinated debt and preference shares
  • The IRDAI constituted a working group on standardization of Cyber Liability Insurance. IRDAI issued a guidance document on Product Structure for Cyber Insurance
  • Bima Sugam: A digital platform for insurance products & services, launched as an initiative by the IRDAI to connect and empower all insurance stakeholders and cater to all insurance needs under one roof


  • Favourable Demographics

    68% of India’s population is young and 55% of its population is in the age group of 20-59 (working population) in the year 2020 and is estimated to reach 56% of the total population by 2025. These point towards a young insurable population in India

  • Wide middle-class expansion

    By 2030, India will add 140 Mn middle-income and 21 Mn high-income households which will drive the demand and growth of Indian insurance sector.

  • Digital behaviour patterns

    Customers are now starting to prefer digital modes for their insurance needs - 73%/62% of customers preferred the online mode for GI/HI products (2020). Agents’ ease with digital tools has also grown, with 63% of agents comfortable with video-calling clients and >50% amenable to virtual renewals. India is the 2nd largest Internet user market. ~1 Bn Internet Users by 2026.

  • Pandemic-related shift in demand patterns

    COVID has expedited digital adoption and 67% of agents felt customers are more willing to use portals/apps post-COVID. Further, the pandemic increased the insurance penetration rate and triggered awareness on insurance and demand for protection products, especially health insurance

  • Government Initiatives

    AB PM-JAY (world’s largest health assurance scheme): 230+ Mn beneficiaries have been provided Ayushman cards, and over 44 Mn hospital admissions have been authorised through a network of 25,969 empanelled healthcare providers, including 11,700 private hospitals (9th Mar 2023) Pradhan Mantri Suraksha Bima Yojana: 313 Mn beneficiaries have been enrolled under the scheme, and more than 1 lakh claims have been disbursed (30 Nov 2022) Pradhan Mantri Jeevan Jyoti Bima Yojana: 144 Mn beneficiaries have been enrolled under the scheme, and more than 6 lakh claims have been disbursed (30 Nov 2022) Pradhan Mantri Fasal Bima Yojana (risk coverage against crop damage), is the world’s number one crop insurance scheme in terms of farmer applications enrolled and is also the world’s 3rd largest crop insurance scheme in terms of gross premium. Between 2016 and 2022, 276 Mn applications were received under the scheme, and claims of about $ 16.7 Bn (INR 1.28 Lakh Cr) have been paid to the farmers


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Asked Questions

What are some of the Government Insurance schemes?

Some of the Government Sponsored Socially Oriented Insurance Schemes are:

  • Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
  • Pradhan Mantri Suraksha Bima Yojana(PMSBY)
  • Life Cover under Pradhan Mantri Jan Dhan Yojana (PMJDY)
  • Varishtha Pension Bima Yojana
  • Pradhan Mantri Fasal Bima Yojana(PMFBY)
  • Pradhan Mantri Vaya Vandana Yojana(PMVVY) ·
  • Restructured Weather Based Crop Insurance Scheme (RWBCIS)

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How can one commence an insurance business in India?

Any entity desiring to carry on insurance business in India should make an application to the Insurance Regulatory & Development Authority of India (IRDAI) for issuance of requisition for registration application form. For more information, please read the IRDAI (Registration of Indian Insurance Companies) Regulations, 2000 available here. Further, for foreign investments, please refer to the Indian Insurance Companies (Foreign Investment) Rules, 2015 available on the IRDAI website, and the FDI Policy related to insurance activities available here.

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What are the classes of insurance business for which a registration application can be made?
  • Life insurance business
  • General insurance business
  • Health insurance business exclusively
  • Reinsurance business.

For more information, please read the IRDAI (Registration of Indian Insurance Companies) Regulations, 2000 available here.

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How can a foreign reinsurer operate in India?

Foreign reinsurers, both Lloyd’s and other reinsurers, can operate in India by registering under the IRDAI (Lloyds India) Regulations 2016 or IRDAI (Registration and Operations of Branch Offices of Foreign Reinsurers other than Lloyd’s) Regulations, 2015, respectively. For more information, please access the regulations here and here. Further, for foreign investments, please refer to the Indian Insurance Companies (Foreign Investment) Rules, 2015 available on the IRDAI website here, and the FDI Policy related to insurance activities available here.

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What is the quantum of foreign investment allowed in Insurance business in India?

The FDI policy permits 74% foreign investment in Indian insurance companies. Further, all Indian insurance companies with foreign investment need to ensure compliance with the Indian Insurance Companies (Foreign Investment) Rules, 2015 (available on the IRDAI website here) and other applicable rules and regulations of the IRDAI. This includes the new resident directors/KMPs, additional independent directors and solvency requirements as mentioned in the Foreign Exchange Management (Non-Debt Instruments) Rules 2019, available on the RBI website here.

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