The insurance industry of India has 57 insurance companies, out of which 24 are in the life insurance business, while 34 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. There are six public sector insurers in the non-life insurance segment. In addition to these, there is a sole national re-insurer, namely General Insurance Corporation of India (GIC ).
The life insurance industry is expected to increase at a CAGR of 5.3% between 2019 and 2023. India’s insurance penetration was pegged at 3.76% in FY20, with life insurance penetration at 2.82% and non-life insurance penetration at 0.94%. In terms of insurance density, India’s overall density stood at US$ 78 in FY20.
The market share of private sector companies in the general and health insurance market increased from 47.97% in FY19 to 48.03% in FY20. In the life insurance segment, private players held a market share of 33.78% in FY20. In FY21, premium from new business of life insurance companies in India stood at US$ 31.9 billion.
In India, gross premiums of non-life insurers reached US$ 26.52 billion in FY21, from US$ 26.49 billion in FY20 between April 2019 and March 2020, driven by strong growth from general insurance companies.
In March 2021, health insurance companies in the non-life insurance sector increased by 41%, driven by rising demand for health insurance products amid COVID-19 surge. The current running financial year is also poised to see a rise in new insurance coverage and claims owing covid and related health concerns that arise with it.
Budget 2021 of the Union Government increased FDI limit in insurance from 49% to 74%. India's Insurance Regulatory
and Development Authority (IRDAI) has announced the issuance, through Digilocker, of digital insurance policies by insurance
Under the Union Budget 2021, Finance Minister Nirmala Sitharaman announced that the initial public offering (IPO) of LIC
will be implemented in FY22. LIC’s IPO has the potential to raise Rs. 1 lakh crore (US$ 13.62 billion).
In February 2021, the Finance Ministry announced to infuse Rs. 3,000 crore (US$ 413.13 million) into state-owned general
insurance companies to improve the overall financial health of companies.
Under Union Budget 2021, fund of Rs. 16,000 crore (US$ 2.20 billion) has been allocated for crop insurance scheme
to boost the rural economy that is dull owing to the covid lockdown.
Life insurance industry in the country is expected to grow 12-15% annually over the next three to five years.
Major factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of the Indian life insurance Industry.