The Indian insurance market has witnessed an impressive growth rate in the last two decades primarily driven by the bigger private sector participation and hugely improved distribution capabilities, along with marked improvements in operational efficiencies.
The insurance industry of India has 57 insurance companies; 24 being in the life insurance business, while 34 are General Insurers. It has undergone and triumphed over multiple challenges and changes before becoming one of the fastest-growing markets.
Due to strong demand for health and motor policies, the first quarter of FY24 witnessed non-life insurance premium income increasing by 17.9% year-over-year to Rs. 64,262 crore (USD 7.72 billion)
The premium in March 2023 for the private life insurance industry grew at a good pace of 35% on a year-on-year basis and 20% for FY23.
As per IRDAI data, Life insurance firms collected 18% more premiums in FY23 as compared to the year before. Life insurers collected Rs. 3.71 lakh crore (USD 44.85 billion) as the first-year premium in FY23 as against Rs 3.14 lakh crore (USD 37.96 billion) in FY22.
The Insurance Regulatory and Development Authority of India (IRDAI), estimates that the Indian insurance industry is projected to reach USD 222 billion by 2026 to become the 6th largest insurance market globally, overtaking countries like Germany, Canada, Italy, and South Korea.
The business factors contributing to the growth of the Insurance market in India are:
- Favourable Demographics
- Wide middle-class expansion
- Technological Advancement
- Emergence of Point of Salespersons
- Increased Distribution of Rural Insurance
- Key Technologies: Artificial Intelligence, Internet of Things, Machine Learning, Application Programming Interface