Article,
Indian Insurance Industry–An Overview
International Journal of Recent Innovations in Academic Research, 7 (12): 63-68 (December 2023)
DOI: https://doi.org/10.5281/zenodo.10695164
Abstract
Insurance is the backbone of a country’s risk management system. Risk, which can be insured, has increased enormously in every walk of life. This has led to growth in the insurance business and the evolution of various types of insurance covers that provide protection from risk and ensure financial security. The insurance sector acts as a mobilizer of savings and a financial intermediary, and it is also a promoter of investment activities. It can play a significant role in the economic development of a country (Arora, 2002). The life insurance industry in India has come a long way since its liberalization in the year 2000. The industry has had its own ups and downs, driven by a multitude of factors including the scale and frequency of regulatory changes, the global financial meltdown, evolving consumer awareness, the emergence of dominant channels like bancassurance, and changed market dynamics. Despite the progress made by the industry since the year 2000, India remains grossly underinsured compared to other developed economies both in terms of penetration and density (IRDAI’s Annual Report, 2022-23). Overall insurance penetration (premiums as a % of GDP) in India reached 3.69% in 2017 from 2.71% in 2001. Life insurance penetration increased from 2.2% in FY 2002 to 3.2% in FY 2022, and non-life insurance penetration increased from 0.5% in FY 2002 to 1% in FY 2022. Life insurance density rose from $9.1 in FY 2002 to $69 in FY 2022, and non-life insurance density increased from $2.4 in FY 2002 to $22 in FY 2022.The opportunity for the industry is immense and hence the model of distribution of life insurance continues to evolve daily.
