PMR Projects an Impressive Growth Outlook for India’s Insurance Market Owing to Increased Innovation in Insurance Products, Including The Advent Of Insurtech Technology And Favourable Government Initiatives
Industry: Consumer Goods
Format: PPT*, PDF, EXCEL
Delivery Timelines: Contact Sales
Report Type: Ongoing
Report ID: PMRREP34601
The India insurance market is estimated to reach a valuation of US$314.3 Bn the year 2031, at a CAGR of 7.2%, during the forecast period 2024 to 2031.
Key Highlights of the Market
|
Market Attributes |
Key Insights |
|
Market Value (2024) |
US$193 Bn |
|
Market Size (2031) |
US$314.3 Bn |
|
Forecast Growth Rate (CAGR 2024 to 2031) |
7.2% |
|
Historical Growth Rate (CAGR 2018 to 2023) |
6.6% |
India is the fifth largest insurance industry and has emerged as one of the fastest-growing insurance markets globally.
The growth of the Indian insurance market can be attributed to the growing income, rapid economic development and increased awareness about financial planning and regulatory reforms.
The life insurance sector in India is characterized by a diverse range of insurance products catering to the diverse needs of customers by providing new and customized insurance plans and savings and investment-linked policies.
In recent years, the insurance industry in India has been experiencing fierce competition among its peers, leading to new and innovative products within the industry and attracting consumers by offering the best insurance plans in India.
The insurance industry in India has witnessed crucial transformations in terms of modified regulations, new developments, and proposals for amendments and has opened new avenues for the industry, ensuring that insurance products stay relevant with the changing times.
The trend of innovating health insurance products and the increased awareness about health & fitness drives the insurance market in India forward.
The trend of innovating health insurance products is reshaping the landscape of the health insurance market in India.
Insurance companies in India are introducing new policies that cover traditional medical expenses and incorporate innovative features like wellness benefits, telemedicine consultations and custom personalized health management programs.
The launch of such innovative insurance products caters to evolving consumer needs by providing comprehensive coverage and value-added services to enhance customer retention.
Further, people understand the importance of preventive healthcare measures, regular health check-ups, and maintaining a healthy lifestyle, aiding the growth of the Indian insurance market.
This heightened awareness has increased demand for health insurance products that offer coverage for preventive care, diagnostic tests, and wellness initiatives.
As insurers continue to adapt to these trends and consumer preferences, the life insurance market in India is estimated to witness continued growth and development during the forecast period.
The India insurance market has witnessed staggering growth over the last two decades, owing to the higher participation of the private sector and the enhancements in distribution capabilities and operational efficiencies.
The market witnessed a growth rate of 6.6% during the historical period 2018 to 2023, to reach a substantial valuation in 2023, despite resilience and growth amidst various challenges and opportunities.
Regulatory reforms, technological innovations, and shifting consumer behaviors are a few crucial factors contributing to the insurance sector's expansion in India and positioning it as one of the key components of India's financial services industry.
Further, the market is estimated to continue evolution, with key insurance companies in India focusing on enhancing customer engagement, expanding digital capabilities, and addressing emerging risks to sustain the growth momentum over the forecast period.
Technological Development
The insurance sector has experienced a significant shift from its conventional offline framework, owned by corporate agents, brokers, and banks.
The way consumers are obtaining insurance products has been revolutionized with rapid digitization, product developments and progressive legislation.
Further, the introduction of intuitive mobile applications has streamlined the process of insurance purchase while improving the overall customer experience and expanding the availability channels.
Currently, several fintech start-ups, and major insurance companies provide insurance products through mobile applications and websites, reducing the inconvenience associated with acquiring insurance and enhancing the overall consumer experience with buying insurance plans.
Increased Per Capita Income
As India's economy is reaching new heights in terms of GDP value, the per capita income of people in India also witnessed a surge.
Further, due to the increased availability of funds for savings and investments, people are progressively seeking methods to safeguard their financial future, such as insurance.
As financial awareness increases, people become more aware of safeguarding their assets and financial well-being.
Due to this, there has been an increase in the demand for insurance products, including health insurance, agricultural insurance, and motor insurance, which eventually aids the growth of the India insurance market share.
Favorable Government Initiatives
The government of India have started some key insurance schemes for Indian nationals which have witnessed success in quick time.
For instance, AB PM-JAY, which is the world's largest health assurance scheme saw its beneficiary’s numbers go beyond 230 million and have been provided Ayushman Cards, which is a new health identity card for people in India.
It has been reported that around 44 million hospital admissions have been authorized in 2023, through a network of 25000 authorized healthcare providers throughout the nation, including around 12000 hospitals.
Pradhan Mantri Suraksha Bima Yojana is another crucial government scheme where around 300 million beneficiaries have been enrolled under the scheme, and more than 1 lakh claims have been disbursed.
Further, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Fasal Bima Yojana, which is risk coverage against crop damage, is the topmost crop insurance scheme globally in terms of farmer applications enrolled and also the world's third largest crop insurance scheme in terms of gross premium.
Low Insurance Penetration
According to reports, around 500 million people in India were covered under the health insurance schemes in India in 2023, which is merely 37% of the total population in the country.
Despite growth, insurance penetration in India remains relatively low compared to global averages. The low insurance penetration in India is primarily due to inadequate awareness about insurance products and their benefits among people, especially in rural and semi-urban areas.
The lack of awareness about insurance plans prevents many people from understanding the value of insurance in mitigating financial risks and planning for the future.
As a result, a large segment of the population remains underinsured or uninsured, limiting the overall India insurance market size and growth potential for insurers.
Employing crucial initiatives to enhance financial literacy and expand distribution networks to reach uninsured people will certainly address this challenge and eventually help the market evolve.
Underdeveloped Distribution Channels
The India insurance market share has been adversely affected by the challenges in reaching out to potential customers in remote areas due to limited infrastructure, and connectivity that restrict insurers' ability to penetrate these markets and reach potential customers.
Further, recruiting and retaining qualified insurance agents or representatives in remote areas can be difficult.
This is a crucial reason for the limited availability of skilled workers that is willing to work in challenging geographic locations, which creates a major barrier to the growth of the insurance industry in India.
Insurtech Revolutionizing India's Insurance Market
Numerous opportunities are present for businesses seeking to enter the insurance technology or insurtech industry in India, which is one of the fastest-growing markets.
The insurance business is created, distributed, and administered effectively by high-end digital technology called insurtech.
With the country's extensive population, the growing number of middle-class and upper-middle-class populations with the increasing usage of the internet and smartphone utilization is appealing to several insurtech companies to offer innovative insurance solutions.
Considering the above facts, India's insurtech market opportunity is estimated to be worth up to US$300 Bn, owing to several significant trends and developments.
This includes digital distribution channels, Artificial Intelligence (AI), data analytics, telematics, and the Internet of Things (IoT), wellness initiatives, health technologies, and P2P insurance.
Conventional insurance models are being disrupted, and new solutions are being offered to satisfy the evolving needs of consumers by the insurtech sector in India, which is experiencing significant growth and innovation.
The provision of digital insurance solutions is one of the primary areas of opportunity for insurtech companies to expand their businesses in India, with a substantial opportunity for insurtech firms to provide low-cost, user-friendly digital insurance products as a major portion of the Indian population continues to lack access to traditional insurance products.
With such advancements, the market for insurance in India has the potential to significantly affect the lives of millions of individuals if insurtech companies can offer the best life insurance plans in India that are affordable, accessible micro-insurance products, which will eventually aid the market's growth.
Life Insurance Dominant, Captures Nearly 75% Market Share
|
Market Segment by Insurance Type |
Market Value Share 2023 |
|
Life Insurance |
75% |
Based on insurance type, the India insurance market is further segmented into life insurance, non-life insurance and general insurance, where the life insurance market dominates the market with 75% of the total market share.
The life Insurance segment owns the major market share due to its affordability and coverage for a specific period at a comparatively lower premium.
Due to this feature, people prioritizing financial security opt for life or term insurance policies to secure their families in case of untimely demise without any financial hassles.
The flexibility offered by these plans allows people to customize their insurance plans according to their financial stability and needs.
The non-life insurance segment has several products namely, health insurance, motor insurance, and travel insurance, where health insurance has the major market share owing to the increased healthcare expenses and the growing awareness about the benefits of having health insurance plans.
Repetitive Subscriptions Contribute 60% of India Insurance Market Share
|
Market Segment by Customer Type |
Market Value Share 2023 |
|
Repetitive Subscriptions |
60% |
Based on customer type, the India insurance market is further classified into new subscriptions and repetitive subscriptions, where the repetitive subscriptions segment dominates the market with 60% of the total market share in the customer type segmentation.
Due to the emphasis on long-term relationships and customer loyalty, further in connection with the efficient customer service and the volume of returns are the key reasons for the sheer dominance of the repetitive subscriptions segment.
Several individuals opt to renew their ongoing insurance plan rather than switching their insurance providers frequently to take the liberty of high returns and customer loyalty while expecting an efficient service from their service provider.
January 2024
Shriram LI Holdings (SLIH) signed a merger and acquisition deal with Shriram Life Insurance Company (SLIC), which was approved by the CCI.
September 2023
India, and the UK have signed a partnership agreement to boost cross-market investments in the insurance sector.
August 2023
Tata AIA, a subsidiary of the Tata group of companies, launched Tata AIA Pro-Fit, a ULIP plan to offer critical illness cover benefits to their consumers.
The India insurance market is poised for growth, driven by economic expansion, rising incomes, and increasing awareness.
The market's growth primarily depends on innovation, digital transformation and effective management of the crucial regulatory challenges to cater to the evolving consumer expectations and the overall market dynamics.
Further, the key players in the industry compete on factors like product innovation, distribution network, customer service, regulatory compliance, market challenges and the outlook.
|
Attributes |
Details |
|
Forecast Period |
2024 - 2031 |
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Historical Data Available for |
2018 - 2023 |
|
Market Analysis |
US$ Billion for Value |
|
Key Companies Profiled |
|
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Pricing |
Available upon request |
By Insurance Type
By Customer Type
By Age Group
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India’s insurance market size values at around US$193 billion in 2024.
India’s insurance market is estimated to exhibit a growth rate of 7.2% over the forecast period 2024 to 2031.
The market is segmented based on insurance type, customer type and age group.
Life Insurance Corporation of India (LIC), HDFC Life Insurance Company Ltd., ICIC Prudential Life Insurance Company Ltd., SBI Life Insurance Company Ltd., and Max Life Insurance Company Ltd. are some of the key players in the industry.
The India insurance market is estimated to be valued at US$314.3 billion in 2031.
