Insurance in India

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Indian insurance industry’s market size as of 2020 is US$ 280 billion. The insurance sector is predicted to grow at a CAGR of 5.3% in 2019-2023. The insurance penetration of India FY2020 was 3.76%. The various entities of the industry are also bringing out newer products regularly to attract their customers.

At present, there are 24 life insurers in India. The IRDA has recently taken away the tariffs of the interest rates and this has provided insurers greater independence when it comes to deciding the price of their insurance policies. The insurance industry has also become more competitive as a result.

Yet another important factor affecting this sector has been the recent financial meltdown.

India insurance industry growth in last few years

India currently has 57 insurance companies.

  • LIC is the only public sector life insurance company.
  • The market size of the insurance sector in 2020 is US$ 280 billion.
  • The market share of private companies in the general health insurance market was 48.03% in FY20.
  • Health insurance companies in the non-life insurance sector increased by 41% due to the COVID-19 Pandemic.
  • India is the second-largest insurance technology market in Asia-Pacific.
  • LIC recorded 10.11% growth in FY21, with an income of RS. 56,406 crores.
  • Max life insurance launched the ‘Max Life Saral Pension' in May 2021.
  • India is ranked 10th in the world in Life insurance.

India insurance industry - market share of leading companies

The following table shows the market share of top insurers in India in the period till April 2011:

CompanyApproximate market share
SBI Life11.50%
HDFC Life9.70%
ICICI Prudential5.80%
Max Life4.80%
Tata AIA3.10%
Bajaj Allianz3.10%
Birla Sunlife2.20%
Kotak Mahindra1.80%
PNB Met Life1.40%
India First1.30%

In terms of policies sold following are the top insurers in India(2020-2021)

CompanyPolicies sold till December 2011 (approximate figure)
TATA AIA Life261319
Shriram Life145514
SBI life884372
Reliance Nippon Life112635
PNB Metlife139922
Max Life367673
Kotak Mahindra Life180294
Aditya Birla Sun154238   
ICICI Prudential Life379520
HDFC Life592360

India insurance industry - some key findings

Following are some important findings from the World Bank regarding the condition of the insurance industry in India:

The premium for the insurance industry for FY21 stands at US$31.9 Billion.

There are over 110 InsurTech start-ups in India as of 2020.

Factors such as decreasing healthcare, Increasing health problems, high medical expenses and public fear instilled by the pandemic are driving people to buy life insurances. Increasing the insurance companies’ growth.

India insurance industry major problems

Following are some of the major problems plaguing the insurance industry in India:

  • Focus on actuarial pricing
  • Regulatory misunderstanding
  • Investment regulations
  • Solvency regulation
  • Claims settlement procedures
  • Data clarity
  • Distribution channel issues

India insurance industry contribution to GDP

Experts believe that around the world the insurance industry contributes around 4.5% to national GDPs. They have questioned the logicality of opinions that in India the contribution can be higher saying that there are other important sectors like education, defence, and health that cannot be undermined in this context.

They have ruled out possibilities that the sector can contribute 10% to India's GDP. The Chairman of IRDA, Hari Narayan has ruled out any such possibility asking if India's GDP growth will be that much in the next few years ahead.

The IRDA states that in India land and gold are more preferred as forms of investment. Narayan feels that if the insurance sector is to do well in terms of contribution to GDP then more people should be convinced about its capability to provide good ROI (return on investment).

Why are more people taking insurance policies?

One of the major reasons for an increasing number of people availing of insurance policies in India is the growing level of awareness. People nowadays value their lives, their health, and their families even more than before given the tough economic circumstances and so want to make sure that everything is fine even if they are not there.

Yet another reason for the growing popularity of insurance policies is the benefit of tax exemption that is provided to family-oriented and individual plans. The majority of the private insurers also provide lucrative returns and are now being availed by a section of the Indian society with greater disposable earnings.

There is an aspect of psychological comfort attached to the insurance policies as well - whenever insurance is availed the policyholder can be more or less assured of a safe future for that particular part of his or her life.

Top Insurance Policies

Following are the featured insurance policies of various insurers in India:

SBISBI life shield
HDFCHDFC life click 2 protect plus
AvivaAviva i-life   
Care PlusFuture Generali care plus   
Aditya Birla SunBirla sun life BSLI   
LICLIC Jeevan Pragati plan   
Max LifeMax Life Online Term Plan Plus Basic Life Cover   
ICICIICICI Prudential iProtect Smart   
Bharti AxaBharti Axa Life Elite Secure   
Last Updated on August 10, 2021