Indian insurance market is on rise with the total insurance premiums growing by 7.7% in FY24 and reaching Rs 11.2 lakh crore, despite a minor drop in insurance penetration from 4% in FY23 to 3.7% in FY24. While non-life insurance penetration stayed steady at 1%, life insurance penetration decreased slightly from 3% in FY23 to 2.8% in FY24.
It is noteworthy that Indian insurance industry received the highest FDI at 62% of total equity FDI inflows to the services sector. A growth opportunity exists in Tier 2 and Tier 3 cities with an insurance penetration rate of 3.7%, lower than the global average of 7%.
Innovative distribution models can help enhance Insurance density in India, having increased slightly from $92 in FY23 to $95 in FY24, which is still lower than global standards. While Life insurance density stayed steady at $70, non-life insurance density rose from $22 to $25.
Non-life insurers’ gross direct premiums grew by 7.7% year over year, from Rs 2.6 lakh crore in FY23 to Rs 2.9 lakh crore in FY24, led primarily by Health and Motor segments.
With premium income of Rs 8.3 lakh crore in FY24 compared to Rs 7.8 lakh crore in FY23, the life insurance sector grew by 6.1% YoY. New businesses contributed the remaining 45.6% of the total premiums received by the life insurers, with renewal premiums making up 54.4%.
In FY24, the life insurance sector disbursed benefits totaling Rs 5.8 lakh crore, of which Rs 42,284 crore was attributable to death claims. In same period, non-life insurers’ net incurred claims totaled Rs 1.72 lakh crore.