Insurance penetration in India is 4%, lower than global average of 6.8%

IRDAI report reveals that the insurance penetration in India is 4% of its GDP. It reduced from 4.2% of the GDP in FY 22 to 4% of the GDP in FY 23.

India’s penetration is much lower than global average of 6.8%, shows the report.

The report also reveals that the density of insurance industry in India has marginally increased from USD 91 in FY 22 to USD 92 to FY 23.

India ranks 25^th in insurance penetration and 27^th in insurance density globally in 2022-2023.

While insurance penetration is measured as the percentage of insurance premiums to GDP, insurance density is calculated as the ratio of premium to population (per capita premium).

Life insurance

The penetration of life insurance in India is 3% of the total GDP in FY 2023. While it reduced from 3.2% in FY 2022, it is still higher than the global average of 2.8% in FY 2023.

In terms of density of the life insurance industry, it marginally grew to USD 70 in FY 2023 from USD 69 in FY 2022.

Non life

India is far behind global markets in terms of penetration of non-life industry. It stood at 1% of the GDP in FY 2023. Last financial year as well, the industry recorded penetration of 1% of the GDP.  The global average of the non-life industry is 4%.

The density also remained unchanged at USD 22 in FY 2023.

Other interesting facts

• India’s insurance penetration is higher than China, Pakistan and Russia
• However, in terms of density, India stands behind China and Russia but surpasses Pakistan
• While Taiwan has the highest insurance penetration in Asia Pacific region, Singapore has the highest insurance density in Asia Pacific region