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The penetration of Indian insurance industry is less than 5% of the GDP. IRDAI data shows that India’s insurance penetration was 4.2% of the GDP in 2021-22. In terms of penetration, India is far behind the global average of 7% of the GDP.
In terms of penetration, India is ranked 20 in FY 2021-22. Countries like Taiwan, South Africa, the USA and UK report higher penetration of 14.8%, 12.2%, 11.7% and 11.1% respectively.
While the penetration of life insurance sector was 3.20% FY 2021-22, non-life insurance penetration stood at 1.00% last financial year. An analysis shows that while the penetration of life insurance was in line with global average of 3%, India’s non-life penetration was abysmally low against the global average of 3.9%.
Insurance density
Insurance density increased to USD 91 in FY2021-22.
While life insurance density increased to USD 69, non-life insurance density went up to USD 22 in 2021-22.
Globally, the overall insurance density stood at USD 874 and is ranked 27 in terms of density. USA, Singapore and Switzerland report higher density at USD 8193, USD 6610 and USD 6742 respectively.
Why penetration and density matter
Insurance penetration and density indicate level of development in the insurance sector.
While penetration is measured as the percentage of insurance premium to GDP. Insurance density is the ratio of premium to population (per capita premium).
