Despite a challenging operating environment, India’s life insurance market continues to be on an upward trend. It remained on a positive trajectory, driven by a growing economy, rising awareness and a growing middle class.
Robust and Resilient Economic Growth
Despite the climate crisis and geopolitical issues including the Russia-Ukraine conflict, India’s GDP has grown at an estimated 8.2% in FY 2024, compared to 7.0% in FY 2023, as the nation showed resilience in a challenging global environment. It is projected to reach US$ 5 trillion in the next three years, becoming the third-largest economy on the back of continued reforms. India continues to be the world’s fastest growing economy, attributed to a strong domestic demand and a growing working-age population.
8.2%
Estimated GDP Growth in FY 2024
US$ 222 billion
Market Size by 2026
Driving Growth
With increasing private consumption, and upbeat manufacturing and construction activity, India is ranked 5th in world's GDP rankings in 2024. The nation capitalises on its broad domestic market, a youthful and technologically adept labour force, and an expanding middle class. The economy boasts diversity and swift growth, fuelled by key sectors such as information technology, services, agriculture, and manufacturing.
Expanding Insurance Market
Aided by a favourable regulatory environment, we forecast that life insurance premiums will grow by 9% annually (in real terms) by 2032, making India the fifth largest life market globally (based on Swiss Re Report). According to the Economic Survey 2022-23, it is poised to emerge as one of the fastest-growing insurance markets globally, amidst favourable macros, regulatory changes, and positive consumer sentiments.
Reforms Initiatives by Regulatory Bodies
The recent years have been marked by industry-defining initiatives envisioned by Insurance Regulatory Development Authority of India, the prime among them being “Insurance for All” by 2047, aimed at strengthening the entire ecosystem, improving accessibility and reach, and safeguarding policyholders’ interest. IRDAI’s flagship Bima Trinity, comprising Bima Vistaar, Bima Vahak, and Bima Sugam, is considered to be a key game changer for the sector.
Low Insurance Penetration
Insurance penetration is growing, but continues to remain low compared to the global scenario. Penetration of life insurance in India stood at 2.8% of total GDP in FY 2023 due to increasing protection deficit and limited distribution reach. Growth in life insurance business in the last five years is a positive sign for the overall development and maturity of the insurance market in India.
Projected Industry Growth
A growing economy, an expanding middle class, rising incomes and increasing purchasing power, regulatory support and technological advancements is driving insurance market growth. While challenges remain, the sector is well-positioned to contribute significantly to India’s financial inclusion goals and secure the future of millions. The call to embrace connecting data ecosystems, expand distribution and innovate the product landscape is the key to achieving the vision of comprehensive insurance coverage in India. Over the next five years (2024–28), Swiss Re forecasts total insurance premiums to grow by 7.1% in real terms, well above the global (2.4%), emerging (5.1%) and advanced (1.7%) market averages. At this rate, India will be one of the fastest growing insurance sector amongst the G20 countries.
7.1%
Projected Growth in Insurance Premiums by 2028 Vis-à-Vis 2.4% Global Average
India’s insurance penetration at 3.8% vs 6.5% globally
