India Insurance Sector: India has achieved great success in the insurance sector. India’s insurance sector is growing rapidly. The country’s insurance sector has achieved a CAGR growth of 11 percent during the financial year 2020-23. On the basis of this growth, the insurance sector has also left behind countries like China and Thailand.
India’s insurance sector is growing rapidly
According to a latest report, the insurance sector has recorded a GWP of over $130 billion, which is more than Thailand and China. In comparison to India, the growth for the insurance sector of China and Thailand was less than 5 percent. According to a latest report by global management consulting firm McKinsey & Company, the life insurance industry is set to grow at 11 percent year-on-year to reach $107 billion by 2023.
India’s sector in a better position
The general insurance industry has grown by 15 per cent year-on-year to reach $35.2 billion. According to the report, favorable conditions in insurance and other related sectors are in a better position to grow the industry. Apart from this, the Insurance Regulatory and Development Authority of India (IRDAI) has made regulatory interventions to simplify the customer journey and introduce digital innovation. On the other hand, the emergence of private companies has brought changes in operational efficiency, technology and investment.
The number of policyholders is increasing
The report said that insurers are in a position to increase their market share, however, they face many challenges in attracting capital and sustaining growth. According to the report, despite the regulator’s target of insurance for all by 2047, the industry’s penetration rate declined from 4.2 percent in 2022 to 4.0 percent in 2023, indicating that its progress has not been at par with the country’s economic growth.
What are the challenges
The report also said that despite achieving a 17.2 percent CAGR in new business premiums, India’s top five private life insurance companies have recorded less than 2 percent CAGR in net profit over the last five years. This shows a gap between product innovation, distribution efficiency and renewal management. Input-Agency
