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At 3.2 % penetration, India ranks 10th in the global life insurance market and ahead of China (at 2.4%) and UK (at 3%), shows a research report published by Benori Knowledge, a research and analytics company.
The report shows that the life insurance penetration rate in India has grown from 2.8% in December 2019 to 3.2% in December 2021, almost at par with the global average of 3.3%.
The penetration is expected to increase in the coming years as people are realizing importance of financial security. Also, the ease of IRDAI regulations on product approval and distribution and adoption of digitalization will further boost the penetration, says the report.
During 2017-22, the life insurance industry has grown at a CAGR of 11% in total premium and 17% in new business premium. It is estimated to grow at a CAGR of 9% until 2027.
Other key highlights of the report:
- Overall, the life insurance industry has grown at a CAGR of 11% from 2017-2022 and is estimated to grow at a CAGR of 9% in the next 5 years
- Private sector market share grew significantly from 28% in 2017 to 38% in 2022
- Bancassurance is the most popular distribution channel, making up 55% of the distribution mix
- Life insurance agents contributed 23% of the total business between 2017-2022
- A few key trends in life insurance business - Term and ULIPs to gain more traction, industry to increase focus on digital engagement to enhance customer experience, insurers to increase spending in data science and analytics to understand the risk better, pocket size insurance to gain some ground and insurtech to emerge