The Indian insurance industry has witnessed significant growth in the past few years with the introduction of a wide range of advanced insurance products and services. It consists of both life and non-life insurance companies. Out of the 52 insurance companies operating in India, 24 are in the life insurance business, and 28 companies are operating in the non-life insurance segment. Insurance Regulatory and Development Authority (IRDA) is an autonomous body that regulates and promotes the insurance and re-insurance industries in India.
The life insurance market in India was valued at INR 4,185 Bn in FY 2017 and is likely to expand at a compound annual growth rate (CAGR) of ~11.6% during FY 2018 to FY 2023. In 2016, India's share in the global life insurance market was ~2.36% and ranked 10 among 88 countries. The Indian life insurance sector offers around 360 million policies, which is the largest number of policies offered by any insurance sector globally. In this sector, 49% foreign direct investment (FDI) through automatic route is allowed, letting overseas companies buy 49% stake at the domestic insurance companies without prior approval from the government.
Impact of goods and services tax
Implementation of the goods and services tax (GST) is expected to make both banking and insurance products expensive in the country. As of June 01, 2017, service tax has been replaced by 18% GST in premium receipts and other related documents. Life insurance schemes offered by the government, exempted from GST, include the Janashree Bima Yojana (JBY), Aam Aadmi Bima Yojana (AABY), Varishtha Pension Bima Yojana (VPBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Jan Dhan Yogana (PMJDY), and Pradhan Mantri Vaya Vandana Yojana (PMVVY).
Insurance penetration overview
Insurance penetration, which is measured as the ratio of premium underwritten in a given year to the gross domestic product (GDP) of the country, stood at ~3.49% in FY 2017. Life insurance penetration in India was ~2.72% in the same year.
Market segment insights - player-wise
During FY 2017, life insurance companies issued 264.56 lakh new policies out of which LIC issued 201.32 lakh policies, while private insurance issued the remaining 63.24 lakh policies. In FY 2018, the Life Insurance Corporation of India (LIC) reported a growth of ~8% in its new business premium as compared to FY 2017. They continued to be the market leader by grabbing 69.40% of the market share in the total first-year premium, and 75.67% in new policies.
Key growth drivers of the market:
Currently, Indian insurance companies such as LIC, ICICI Prudential Life Insurance, and SBI Life Insurance Company, among others, are introducing comprehensive custom-made micro-insurance products for the rural sector, which covers not just health but accidents as well. Increasing rural income and improving infrastructure are expected to drive the growth of the Indian life insurance market.
Factors such as better management of claims and regulatory trends, coupled with increasing income and the working-class population of the country are expected to drive the growth of the market.
Key deterrents to the growth of the market
Although there has been a rise in the number of insurers in the country, financial literacy, and awareness regarding understanding the products and services offered by the insurance companies act as a significant challenge to the growth of the life insurance market in India.
Key Topics Covered
1. Executive summary
2. Socio-economic indicators
3. Introduction 3.1. Evolution of the Indian insurance sector 3.2. Life insurance market definition and structure 3.3. Overview of the Insurance Regulatory and Development Authority (IRDA)
4. India life insurance market 4.1. Life insurance market overview 4.2. Life insurance market size and growth forecasto value-wise (FY 2016-FY 2023e) 4.3. Market share of major players (FY 2017)
ICICI Prudential Life
4.4. Insurance penetration - overview 4.4.1. Indian life insurance penetration percentage (2012-2016) 4.4.2. Indian insurance density- value-wise (2011-2016) 4.5. Total premium underwritten by life insurers in India (FY 2016-FY 2017)
First year Premium
5. Indian life insurance market - segmentation 5.1. Player-wise market share - on the basis of total premium collected (FY 2016-FY 2017)
5.2. New policies issued player-wise (FY 2017)
5.3. Channel-wise new business (FY 2017)
Corporate agents- banks
Corporate agents- others
6. Impact of goods and services tax (GST) on life insurance premiums
7. Investments in the Indian insurance sector 7.1. Total investments by life insurers - instrumentowise (FY 2016-FY 2017) 7.2. Total investments of life insurers - fund-wise (FY 2016-FY 2017) 7.3. Total investments of the insurance sector (FY 2016-FY 2017)
8. Key growth drivers of the market
9. Key deterrents to the growth of the market
10. Competitive landscape 10.1. ICICI Prudential Life Insurance Company Limited
Products and services
Financial snapshot (total income, net profit/loss)
Business segments, geographical segments
10.2. SBI Life Insurance Company Limited 10.3. Life Insurance Corporation of India 10.4. Aditya Birla Sun Life Insurance Company Limited 10.5. Bajaj Allianz Life Insurance Company Limited 10.6. HDFC Standard Life Insurance Company Limited 10.7. Max Life Insurance Company Limited 10.8. PNB MetLife India Insurance Company Limited 10.9. Reliance Nippon Life Insurance Company Limited 10.10. Tata AIA Life Insurance Company Limited