The life insurance industry in India is projected to grow from INR5.7 trillion (US$81.4bn) in 2019 to INR8.0 trillion (US$98.5bn) in 2024, in terms of gross written premium (GWP), according to GlobalData, a leading data, and analytics company.
GlobalData has revised India’s insurance forecast in the aftermath of the COVID-19 outbreak. An analysis of GlobalData’s Global Insurance Database reveals that Indian life insurance industry is expected to grow at a compound annual growth rate (CAGR) of 7.0% over FY2019-2024, driven by favorable demographic factors, and economic recovery expected over the second half of 2021.
Manisha Varma, Insurance Analyst at GlobalData, comments: “High number of COVID-19 related deaths in the last one year has increased awareness for life insurance in India. Easing of lockdown restrictions and increased adoption of digital distribution will further support the growth.
“Digital distribution got much-needed push as insurers are focusing on ensuring uninterrupted sales support and customer service. Insurers are also offering new products with COVID-19 specific benefits to push sales. In January 2021, new business premiums grew by year-on-year 3.7% to INR213.9bn (US$2.98bn).”
Positive regulatory developments seen in the last six months are expected to support life insurance growth. For instance, increasing FDI limit in insurance from 49% to 74% will encourage foreign insurers to enter the market and bring additional capital.
Additionally, in April 2021, the regulator permitted insurers to invest up to 10% of the outstanding debt instruments in a single Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) issue. The additional investment options will strengthen the financial position of insurers and encourage them to expand their product offerings.
Ms Varma concludes: “With pick-up in vaccination drive, the Indian economy is expected to recover over the second half of the year. Increasing consumer awareness along with favorable demographics and regulatory environment will support the demand for life insurance policies.”