Business

India’s Insurance Sector Expands At 17% CAGR; Projected To Reach $222 Billion By 2026

India’s insurance industry has experienced significant expansion, growing at a compound annual growth rate (CAGR) of 17% over the past two decades. A recent report by TeamLease RegTech projects the domestic market to reach $222 billion by 2026.

However, this growth comes with an increasing compliance burden.

A single-entity insurance company operating within one state must navigate 2,236 unique compliance requirements.

When factoring in the frequency of these obligations, the number rises to 4,638 annually. The sector is regulated at multiple levels-central, state, and municipal-resulting in hundreds of distinct compliance requirements each year.

Additionally, companies must secure 38 licenses, approvals, and permissions under 27 different laws.

Key regulatory requirements include approvals under the IRDAI (Registration, Capital Structure, Transfer of Shares & Amalgamation of Insurers) Regulations, 2024, IRDAI (Registration of Corporate Agents) Regulations, 2015, and IRDAI (Insurance Brokers) Regulations, 2018.

Regulatory Changes & FDI To Drive Insurance Sector Growth

Sandeep Agrawal, Co-Founder and Director of TeamLease RegTech, stated, “The Indian insurance sector, driven by increased awareness, favorable regulatory changes, and enhanced private sector participation, has witnessed impressive growth over the last two decades.”

“The government’s allowance of 100% Foreign Direct Investment (FDI) in the insurance sector would further accelerate growth, attracting significant foreign capital and boosting innovation. However, it is crucial to understand the complexities of compliance management that companies face in this space,” he further added.

Managing regulatory obligations manually using spreadsheets and ad-hoc processes adds to the complexity.

The report suggests key reforms, including fostering a strong compliance culture at the leadership level, leveraging technology to automate compliance management, and implementing robust data security measures to enhance customer trust.

To ease regulatory challenges, the report recommends introducing a single-window licensing system for insurers, promoting RegTech adoption, and creating a centralized digital repository for compliance regulations, allowing companies to focus more on expansion and innovation.

Also Read: India’s Soybean Meal Exports Hit 2.78 Lakh Tonnes In January

Mankrit Kaur

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