How Did India’s Insured Population Surge from 15 Crore to Nearly 40 Crore in a Decade?
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Synopsis
A recent report reveals an astonishing rise in India's insured population, jumping from 15 crore to almost 40 crore in just ten years. This growth is driven by the expansion of group and credit-linked insurance products, aligning with the country's economic growth. Discover the implications of this significant development in the insurance sector.
Key Takeaways
- The insured population in India has increased from 15 crore to nearly 40 crore in a decade.
- Life insurance penetration is low at 2.8 percent compared to global averages.
- Total life insurance premiums reached Rs 8.85 lakh crore in FY25.
- Group insurance demand and product innovation are key growth drivers.
- Long-term growth depends on meaningful protection and pension products.
New Delhi, Dec 22 (NationPress) The life insurance coverage in India has seen a remarkable increase over the past decade, climbing from approximately 15 crore in FY15 to nearly 40 crore in FY25. This surge is primarily attributed to the swift growth of group and credit-linked insurance products, as detailed in a recent report.
This substantial escalation in coverage signifies the ongoing advancement of India’s life insurance sector, which has achieved a compound annual growth rate of about 13 percent over the last 20 years, according to the CareEdge ratings report.
The sector's growth trajectory aligns closely with India’s economic progression, as the GDP at market prices grew at an average rate of around 12.4 percent during the same timeframe, the report reveals.
The increase in demand for group insurance, innovative product offerings, personalized services, and enhanced distribution networks, particularly in individual insurance, have all contributed to this growth.
Despite these advancements, India remains an underpenetrated insurance market. Life insurance penetration was only 2.8 percent in 2023, significantly lower than the approximate 5.6 percent average in developed nations.
Additionally, India’s insurance density was recorded at just $70 in 2023, pointing out the considerable disparity between India and its global counterparts, as stated in the report.
While the number of insured individuals has increased, many policies still offer inadequate sums assured. This implies that significant risks like death protection and retirement income are not sufficiently safeguarded.
Even though policy renewals improved in FY25, the sector's long-term success will hinge on delivering substantial protection and dependable pension products, rather than merely boosting the number of policyholders.
The market remains highly consolidated, with the top five insurers commanding over 85 percent of the total premium income.
Life insurance continues to dominate India's insurance landscape, constituting nearly 74 percent of total premiums in FY25, in contrast to a global average of about 41 percent.
Total life insurance premiums reached Rs 8.85 lakh crore during the year, the report elaborated.
Point of View
I find it crucial to highlight that while the rise in the insured population is commendable, we must focus on improving the quality of coverage. Merely increasing the number of policyholders will not suffice; meaningful protection and reliable pension products are essential for sustainable growth in the insurance sector.
NationPress
22/12/2025
Frequently Asked Questions
What has contributed to the rise in India's insured population?
The increase is primarily due to the rapid expansion of group and credit-linked insurance products.
What is India's life insurance penetration rate?
As of 2023, life insurance penetration in India stands at 2.8 percent.
How much did total life insurance premiums reach in FY25?
Total life insurance premiums in FY25 reached Rs 8.85 lakh crore.
What is the average growth rate of India's life insurance sector?
The life insurance sector has achieved a compound annual growth rate of around 13 percent over the past 20 years.
What percentage of the market do the top five insurers control?
The top five insurers control over 85 percent of total premium income in India.
