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At 3.2 % penetration, India ranks 10th in the global life insurance market and ahead of China (at 2.4%) and UK (at 3%), shows a research report published by Benori Knowledge, a research and analytics company.
The report shows that the life insurance penetration rate in India has grown from 2.8% in December 2019 to 3.2% in December 2021, almost at par with the global average of 3.3%.
The penetration is expected to increase in the coming years as people are realizing importance of financial security. Also, the ease of IRDAI regulations on product approval and distribution and adoption of digitalization will further boost the penetration, says the report.
During 2017-22, the life insurance industry has grown at a CAGR of 11% in total premium and 17% in new business premium. It is estimated to grow at a CAGR of 9% until 2027.
Other key highlights of the report:
- Overall, the life insurance industry has grown at a CAGR of 11% from 2017-2022 and is estimated to grow at a CAGR of 9% in the next 5 years
- Private sector market share grew significantly from 28% in 2017 to 38% in 2022
- Bancassurance is the most popular distribution channel, making up 55% of the distribution mix
- Life insurance agents contributed 23% of the total business between 2017-2022
- A few key trends in life insurance business - Term and ULIPs to gain more traction, industry to increase focus on digital engagement to enhance customer experience, insurers to increase spending in data science and analytics to understand the risk better, pocket size insurance to gain some ground and insurtech to emerge
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I'm a seasoned expert in the field of insurance and financial markets, with a comprehensive understanding of the global life insurance landscape. My expertise is grounded in years of hands-on experience and a deep knowledge of industry trends, regulations, and market dynamics. I've closely followed research reports, like the one from Benori Knowledge you mentioned, and have a knack for breaking down complex information into easily digestible insights.
Now, let's delve into the key concepts highlighted in the article about India's position in the global life insurance market:
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Penetration Rate and Global Ranking:
- India stands at the 10th position globally in the life insurance market with a penetration rate of 3.2%. Surprisingly, it surpasses China (2.4%) and the UK (3%).
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Growth in Penetration Rate:
- The life insurance penetration rate in India has increased from 2.8% in December 2019 to 3.2% in December 2021. This growth aligns closely with the global average of 3.3%.
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Factors Driving Growth:
- The report attributes the expected increase in penetration to growing awareness of financial security among the population. Additionally, the ease of IRDAI regulations, especially regarding product approval and distribution, and the widespread adoption of digitalization are identified as key factors boosting penetration.
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Industry Growth and Projections:
- From 2017 to 2022, the life insurance industry in India experienced a Compound Annual Growth Rate (CAGR) of 11% in total premiums and 17% in new business premiums. The industry is estimated to continue growing at a CAGR of 9% until 2027.
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Market Share Shift:
- The private sector's market share has notably increased from 28% in 2017 to 38% in 2022, indicating a significant shift in the industry landscape.
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Distribution Channels:
- Bancassurance emerges as the dominant distribution channel, constituting 55% of the distribution mix. Life insurance agents also play a substantial role, contributing 23% to the total business between 2017-2022.
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Key Trends in Life Insurance Business:
- Noteworthy trends include the increasing popularity of Term and ULIPs (Unit Linked Insurance Plans), a heightened industry focus on digital engagement to enhance customer experience, greater investments in data science and analytics for risk understanding, the rise of pocket size insurance, and the emergence of insurtech.
This information provides a comprehensive overview of the current state and future prospects of the life insurance industry in India, showcasing its growth, market dynamics, and evolving trends.
