The life insurance industry in India is projected to grow from INR 5.7 trillion (US $81.4bn) in 2019 to INR 8.0 trillion ($98.5bn) in 2024, in terms of gross written premium (GWP), according to analysts at GlobalData.
GlobalData, which has revised its India forecasts in the aftermath of COVID, believes that the country’s life insurance industry will grow at a compound annual growth rate (CAGR) of 7.0% from 2019 to 2024.
“High number of COVID-19 related deaths in the last one year has increased awareness for life insurance in India,” noted Manisha Varma, Insurance Analyst at GlobalData. “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,” Varma explained.
“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 INR 213.9bn (US $2.98bn).”
Positive regulatory developments seen in the last six months are also expected to support life insurance growth in India.
For instance, GlobalData expects that 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, India’s 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.
Analysts believe the additional investment options will strengthen the financial position of insurers and encourage them to expand their product offerings.
Varma concluded: “With vaccination drive picking-up pace, 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.”