GlobalData projects India’s general insurance market to achieve a compound annual growth rate (CAGR) of 9.9% over the next five years to reach INR4.89 trillion ($57.3 billion) by 2028, driven by the personal accident and health (PA&H), motor, and property insurance segments.
“The general insurance industry in India continued its high growth trend and grew by 13.2% in 2023, driven by economic growth and rising disposable income,” said Swetansha Chauhan, Insurance Analyst at GlobalData.
“Rising consumer awareness of health and other general insurance products and robust regulatory reforms also supported India’s general insurance industry growth. The trend is expected to continue in 2024 and 2025,” Chauhan added.
One key growth driver will be the launch of the insurance electronic marketplace Bima Sugam.
The initiative is part of the Insurance Regulatory and Development Authority of India’s (IRDAI) ‘Insurance for All by 2047’ initiative. Regulations related to the marketplace were published in March.
It will serve as a one-stop solution for all insurance stakeholders, including insurers, intermediaries, agents, and customers, and is expected to drive growth by helping to facilitate the purchase, sale, and servicing of insurance policies. This includes the settlement of insurance claims and grievance redressal, thereby promoting transparency, efficiency, and collaboration across the insurance value chain.
Key lines of business
PA&H insurance is India’s largest line of business, estimated to account for a 39.5% share of general insurance GWP in 2024.
It is expected to grow by 14.5% in 2024, primarily driven by increased health awareness following the COVID-19 pandemic and rising medical inflation. PA&H insurance is expected to grow at a CAGR of 12.5% during 2024-28.
Positive regulatory developments will also support the growth of PA&H insurance, GlobalData says. In December 2023, the government proposed establishing a healthcare regulator to organize, standardize, and regulate hospitals participating in health insurance. The regulator will primarily be responsible for increasing health insurance penetration, moving the country towards achieving healthcare for all.
Motor insurance is the second largest line of business and is estimated to account for 31.1% of the general insurance GWP in 2024.
The motor insurance industry is expected to grow 10.4% in 2024, driven by rising vehicle sales. According to the Society of Indian Automobile Manufacturers (SIAM), vehicle sales grew by 12.5% in March 2024 compared to March 2023. This growth is anticipated to continue, propelled by a rising disposable income and an increasing rate of road accidents.
“The growth in vehicle sales was also fueled by the government’s vehicle scrapping policy, which came into effect on April 1, 2023. The policy requires private vehicles older than 20 years and commercial vehicles older than fifteen years to be scrapped. Motor insurance is expected to grow at a CAGR of 7.9% during 2024-28,” Chauhan said.
Property insurance, the third largest line of business, is estimated to account for a 22.5% share of general insurance GWP in 2024. Property insurance is expected to grow by 10.4% in 2024, supported by infrastructure investment.
The government has increased its infrastructure allocation by 11.1% year-on-year to $134 billion in the 2024-2025 budget, which will support the growth of property insurance at a CAGR of 8.3% during 2024-28.
Chauhan concludes: “Recovery in the economy and rising disposable income will continue to support the growth of India’s general insurance industry during the next five years.
Initiatives from the government and favourable regulatory reforms will help in increasing the insurance penetration rate in India (0.98%), which was lower as compared to other Asian markets such as Japan (1.75%), South Korea (1.46%), Hong Kong (1.65%) and China (1.26%) in 2023.”
