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India Insurance Sector

India is one of the fastest-growing economies in the world and is home to a large population of over 1.3 billion people. The country’s insurance industry is rapidly growing, with an expected market size of $280 billion by 2025, a compound annual growth rate (CAGR) of 12%-15%, primarily attributable to rising awareness about the importance of insurance and increasing disposable incomes. The Indian government has implemented various policies to promote growth and innovation in the insurance sector. This report will explore the opportunities for U.S. businesses in India’s insurance sector.

Sector Composition:

India’s insurance sector is dominated by two types of insurance providers: public sector companies and private sector companies. The public sector companies are owned by the Indian government and have been in operation for several decades. There are seven public sector insurers (Life Insurance Corporation of India; General Insurance Corporation of India Limited; New India Assurance; United India Insurance Company Limited; The Oriental Insurance Company Limited; National Insurance Company Limited; and the Agriculture Insurance Company of India Limited). The private sector companies have been allowed to operate in India since 2000, resulting in increased competition and innovation in the sector.  There is a sole national re-insurer, the General Insurance Corporation of India (GIC Re). Other stakeholders include individual and corporate agents, brokers, surveyors, and third-party administrators servicing health insurance claims.

Life insurance is the most significant segment of the Indian insurance market, accounting for approximately 75% of the total market share, although life insurance coverage among Indians is relatively low, covering just 3% of the population. Health insurance is the second-largest segment, followed by motor insurance.  Currently, only 10% of Indians have some form of health insurance. With 55% of India’s population in the working age range of 20-59, insurance companies have a young, insurable population to work with.

The sector is regulated by the Insurance Regulatory and Development Authority of India (IRDAI), established in 1999.

Government Initiatives:

Pradhan Mantri Fasal Bima Yojana (PMFBY) is a crop insurance scheme launched by the Indian government in 2016, aimed at providing financial support to farmers in the event of crop damage due to natural calamities, pests and diseases. Under this scheme, farmers pay a nominal premium, and the government provides the remaining premium amount. The coverage is available for all crops and compensation is based on the extent of crop loss. The scheme is implemented by the Ministry of Agriculture and Farmers’ Welfare and is administered by the Agriculture Insurance Company of India (AIC). The primary objective of PMFBY is to provide affordable crop insurance to farmers and protect them from the risks associated with crop failure. PMFBY now covers over 55 million farmer loan applications per year. 

Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) is an entitlement-based healthcare scheme launched in 2018 and fully funded by the Government of India.  AB-PMJAY aims to provide financial protection to over 107million families (approximately 500million individual beneficiaries).  AB-PMJAY is the world’s largest health insurance scheme and aims to make healthcare accessible and affordable for the poor and vulnerable sections of society. The scheme also focuses on the development of a robust healthcare infrastructure in the country, which can cater to the needs of the people.

The Insurtech Opportunity:

India is currently one of the fastest-growing markets for insurance technology, or insurtech, and presents many opportunities for U.S. businesses looking to expand into this sector. Insurtech powers the creation, distribution, and administration of the insurance business. The country’s large population, increasing internet and smartphone usage, and growing middle class make it an attractive market for insurtech companies looking to provide innovative insurance solutions. Estimates value India’s insurtech market opportunity as high as $339 billion. Some key trends and developments in the insurtech sector in India include:

  • Digital distribution channels
  • Data analytics and AI
  • Internet of Things (IoT) and telematics
  • Healthtech and wellness programs
  • Peer-to-peer (P2P) insurance
  • Regulatory sandboxes

The insurtech sector in India is witnessing significant growth and innovation, disrupting traditional insurance models and offering new solutions to meet the evolving needs of consumers. One of the main areas of opportunity for U.S. insurtech companies in India is the provision of digital insurance solutions. With a large portion of the Indian population still lacking access to traditional insurance products, there is a significant potential for insurtech firms to offer low-cost, easy-to-use digital insurance products.  Another area of opportunity is in the development of innovative products tailored to the Indian market. For example, there is a growing demand for microinsurance, which provides coverage for low-income individuals and families. U.S. insurtech companies that can provide affordable, accessible microinsurance products could tap into this market and potentially make a significant impact on the lives of millions of people.  Challenges remain, however, including regulatory compliance, data privacy issues, and consumer trust. 


The Indian insurance market offers many opportunities for U.S. businesses, including:

Joint Ventures: The Indian government has allowed foreign companies to invest up to 49% in Indian insurance companies. This presents an opportunity for U.S. insurance companies to partner with Indian insurance companies to offer a wider range of insurance products and services to customers.

Reinsurance: Indian insurance companies are required to cede a certain percentage of their business to reinsurers. U.S. companies with expertise in reinsurance can offer their services to Indian insurance companies to help them manage risk more effectively.

Technology Solutions: With the increasing adoption of technology in the insurance sector, U.S. technology companies can provide innovative solutions to Indian insurance companies. This includes developing new products, improving customer engagement, and streamlining back-office operations.

Health Insurance: Health insurance is a rapidly growing segment in India’s insurance market, and U.S. businesses can capitalize on this trend by offering innovative health insurance products and services. This includes telemedicine, disease management programs, and wellness programs.

The experienced U.S. Commercial Service team in India can help guide your market entry or expansion strategies on the Indian subcontinent. For further information regarding this sector, please contact the financial services team at the U.S. Commercial Service in India.

Sources: IRDAI, IBEF, Invest India website, public media articles.