India’s general insurance sector projected to reach $57.3 billion by 2028
India’s general insurance sector projected to reach $57.3 billion by 2028 | Insurance Business Asia
Insurance News
India’s general insurance sector projected to reach $57.3 billion by 2028
Forecasts outlined for PA&H, motor, and property business lines
Insurance News
By
Roxanne Libatique
The general insurance market in India is forecasted to grow substantially, achieving a gross written premium (GWP) of INR 4.89 trillion (US$57.3 billion) by 2028, marking a significant increase from INR 3.35 trillion ($40.36 billion) in 2024.
This represents a compound annual growth rate (CAGR) of 9.9%, as reported by GlobalData, a data and analytics firm.
Factors driving Indian general insurance’s growth
Projections for 2024 indicate an 11.2% rise in the sector, largely propelled by key insurance lines such as personal accident and health (PA&H), motor, and property, which together comprised 93% of all general insurance premiums in 2023.
“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. 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,” said Swetansha Chauhan, an insurance analyst at GlobalData.
Growth of PA&H insurance market in India
In 2024, PA&H insurance is poised to dominate the industry, projected to account for 39.5% of the GWP. Forecasted to grow at 14.5% in the same year, this increase is primarily driven by greater health consciousness following the COVID-19 pandemic and the continuous rise in medical costs.
From 2024 to 2028, the CAGR for PA&H insurance is expected to reach 12.5%. A significant development supporting this growth is the proposed introduction of a healthcare regulator in December 2023, which aims to enhance the standardisation and regulation of hospitals in health insurance systems.
Further supporting the industry, the Insurance Regulatory and Development Authority of India (IRDAI) has greenlit the introduction of “Bima Sugam,” an insurance electronic marketplace, which launched in March 2024.
This initiative aims to streamline the process of purchasing, selling, servicing of insurance policies, and handling claims and grievances, promoting greater efficiency and transparency across the insurance landscape.
Growth of motor insurance in India
Motor insurance stands as the second-largest category, estimated to hold a 31.1% share of the GWP in 2024, with an anticipated growth of 10.4%. This growth is linked to a rise in vehicle sales, which surged 12.5% in March 2024 compared to the previous year, as reported by the Society of Indian Automobile Manufacturers (SIAM).
The sector is expected to see a CAGR of 7.9% over the next four years, partly spurred by the new vehicle scrapping policy that mandates the scrapping of private vehicles older than 20 years and commercial vehicles over 15 years old.
Growth of property insurance in India
Property insurance is forecasted to represent 22.5% of the GWP in 2024, with an expected annual growth of 10.4%. This segment is bolstered by an 11.1% year-on-year increase in governmental infrastructure spending, which totals $134 billion for the fiscal year 2024-2025.
“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,” Chauhan said. “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.”
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