The government of India has taken several necessary steps to encourage the development of the life insurance industry domestically. The National Health Protection Scheme that was introduced in September 2018 provides over $7,700 worth of coverage in life insurance to more than 100 million vulnerable families in the country. When this effort reaches its conclusion, the expected result is an increase in insurance penetration from 34% to 50%.
There are roughly 50 million farmers who benefit from the efforts of the Indian life insurance industry to expand coverage to rural areas as well. The Insurance Regulatory and Development Authority of India expects to issue an IPO for new insurance companies in India in the near future if they are looking to invest equity.
Active firms within the Indian life Insurance industry can now invest up to 10% in additional Tier 1 bonds as a way to shore up their capital. Because almost all of the development for this industry occurs in the private sector, the government initiatives offered today will likely create a robust level of growth for several years to come.
Important Indian Life Insurance Industry Statistics
#1. There are currently 57 insurance companies operating throughout India today. All of this number, 24 of them are in the business of providing life insurance. There is only one private-sector company for the industry: Life Insurance Corporation, or LIC. (India Brand Equity Foundation)
#2. Gross insurance premiums in India reached a total of $94.4 billion in FY18. Over $71 billion came from the life insurance industry in the country. (India Brand Equity Foundation)
#3. The overall insurance penetration, measured as a percentage of the GDP, reach 3.69% in 2017. That figure was only 2.71% in 2001. (India Brand Equity Foundation)
#4. Premiums from new life insurance business increase 3.6% in India to reach a value of $15.4 billion for FY19. The non-life segment of the Indian Insurance industry showed year-on-year gross of 12.4%. (India Brand Equity Foundation)
#5. There were 10 different merger and acquisition deals for the insurance sector in India in 2017. The total value of these transactions was $903 million. (India Brand Equity Foundation)
#6. The insurance sector in India raised roughly $7 billion through public issues in 2017. (India Brand Equity Foundation)
#7. Over the past decade ending in FY18, the Indian insurance industry had a CAGR of 10.5%, gaining over $40 billion worth of value during that time. Life insurance premiums expanded at a rate of 12.5%. (PwC)
#8. India currently accounts for about 2% of the world’s total life insurance premiums. Despite having access to the world second-most populous marketplace, the insurance market is only ranked 15th in the world in terms of premium volume. (PwC)
#9. Although the public sector controls 98% of the overall insurance market in India, it only holds a 72% share of the total revenues. (PwC)
#10. The life insurance industry in India has the highest density in the country, registering $43 in 2015. This figure has declined since 2010 when density was measured at $56. The penetration percentage has gone down as well, falling from 4.4% in 2010 to 2.7% in 2015. (HSBC Research)
#11. India’s life insurance penetration rate is much lower compared to its peers in the region as of 2016 data. Taiwan has the highest rate at 15.6%. Hong Kong follows at 12.7%. Japan and the United Kingdom are both at 8%. India is right behind the United States, trailing Americans by 0.4%. (HSBC Research)
#12. Density for the life insurance industry in India is one of the lowest in the world. Hong Kong offers the highest rate at more than $5,000. The United Kingdom, Taiwan, Japan, Singapore, France, and South Korea are all above $2,000. Even the United States ranks highly at $1,657 compared to India’s $44. (HSBC Research)
#13. 22% of India’s GDP comes from household savings that are physical and financial. Since 2010, the proportion of financial assets for a household has been falling. Of total household savings, 19% consist of life insurance premiums, which is down 26% from its peak in 2010. (HSBC Research)
#14. The top five players in the market today control 89% of the total premiums which are found in the region. That percentage is 14 points higher than what Singapore experiences, while it is 44 percentage points higher than what the Indonesian market experiences. (HSBC Research)
Indian Life Insurance Industry Trends and Analysis
The overall insurance industry in India is expected to reach a total of $280 billion in revenues by 2020. If that forecast extends to 2025, then the sector may reach $400 billion for the first time. The life insurance statement will continue to provide at least 65% of the overall market share assuming that the trends which are in place today will still exist.
Although life insurance trends are lower than non-life ones in recent years, the industry should begin to see growth levels equalize once again in the near future. The average rate of growth for the life insurance industry segment in India could be as high as 15% each year through 2023. It would then potentially drop to 4% to 6% over the next couple of years after that.
There are still unpredictable factors in India, such as the growing middle-class, our younger insurable population, and an increasing awareness of wanting protection and retirement planning to consider. The gains could be even higher than expected for the industry, but there is also a high level of risk to evaluate before getting involved.
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