Insurance is a means of protection from risk and loss. Today, insurance policies are available worldwide for assets ranging from your favourite gadget to space satellites. And the growth of the Indian insurance market proves that more people are taking insurance seriously in the country.
While the concept of insurance goes back several thousands of years, the first life insurance company in India was established in Calcutta in 1818. Oriental Life Insurance Company became the first insurance provider in India, but as per the Life Insurance Corporation of India, the company did not provide services to Indians under colonial rule.
Indian postal life insurance
Things changed over the next few decades. Bombay Mutual Life Assurance Society became the first Indian insurer in 1870, and others followed. For instance, the Indian Postal Life Insurance (PLI) introduced in 1884 was released as a welfare scheme for postal employees. It was later extended to those working in the telegraph department and was also one of the first Indian companies to cover female lives.
Nearly 140 years later, Postal Life Insurance shows no signs of slowing down. Starting with just a few hundred policies in 1884, PLI recorded over 50 lakh policies in FY21.
Indian insurance market in the next 10 years
Swiss Re, the world’s largest reinsurer, has remarked on India’s rapidly emerging insurance market in its ‘World insurance: inflation risks front and centre’ report.
Swiss Re’s data for 2021 shows that the US dominates the world insurance market, followed by China and Japan. The three countries contribute to 56% of global premiums. Over the next year, the report suggests that the numbers will likely shift in favour of Asian countries as Europe grapples with the Russia-Ukraine conflict. Among Asian countries – which account for six spaces in the top 20 countries with maximum total premium volume – India is expected to be one of the fastest-growing insurance markets over the next decade.
The report adds that India is set to become the world’s sixth-largest insurance market within the next 10 years. As per the projected growth rate, the life insurance premiums in India will exceed 100 billion USD in 2022.
Indian insurance market and the world
In 2021, India held a 1.9% market share worldwide in terms of insurance premium values, clinching the 10th spot on the global list. Additionally, India is also the second-largest emerging insurance market globally.
As per Swiss Re, the premiums are expected to show an average per annum increase of 9% (in real terms) over the next decade. The Indian insurance market is likely to overtake Germany, Canada, Italy and South Korea by 2032 to become the sixth-largest in the world.
Reasons for growth
India’s insurance market share is expected to grow to 6.6% in 2022 and touch 7.1% in 2023. This growth is based on various factors such as the country’s rising digital penetration, young population demographic, risk awareness and increased disposable income.
Also supporting India’s expanding insurance market are specific regulatory policies for non-life insurance schemes. In particular, the report added that Ayushman Bharat, the government’s public health programme, has contributed to market expansion.
With international and national conditions that support growth in total premium volume, India could soon develop into one of the biggest entities in the global insurance market.