India’s insured population jumps to nearly 40 crore in a decade: report

India’s life insurance coverage has expanded sharply over the past decade, with the number of insured individuals rising from around 15 crore in FY15 to nearly 40 crore in FY25, driven largely by the rapid growth of group and credit-linked insurance products, a report said on Monday.

The expansion reflects the sustained growth of India’s life insurance sector, which has recorded a compound annual growth rate (CAGR) of about 13 per cent over the last 20 years, according to a report by CareEdge Ratings.

The sector’s growth has broadly tracked India’s economic expansion, with GDP at market prices growing at an average rate of around 12.4 per cent during the same period, the report noted.

According to the report, rising demand for group insurance, product innovation, customised offerings and the strengthening of distribution networks — particularly in individual insurance — have supported this growth.

Despite the progress, India remains a significantly underpenetrated insurance market. Life insurance penetration stood at 2.8 per cent in 2023, well below the average of around 5.6 per cent in developed economies.

Insurance density in India also remained low at $70 in 2023, highlighting the substantial gap between India and global peers.

The report pointed out that while insurance coverage has widened, many policies continue to offer low sums assured, limiting effective protection against key risks such as death and inadequate retirement income.

Although policy renewals improved in FY25, the report said the long-term impact of the sector would depend on offering meaningful risk protection and reliable pension products, rather than merely expanding the number of policyholders.

The life insurance market remains highly concentrated, with the top five insurers accounting for over 85 per cent of total premium income.

Life insurance continues to dominate India’s insurance industry, contributing nearly 74 per cent of total premiums in FY25, compared with a global average of about 41 per cent.

Total life insurance premiums reached ₹8.85 lakh crore during the year, the report added.