India’s Insured Population Jumps From 15 Crore To Nearly 40 Crore In A Decade: Report

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

According to a CareEdge Ratings report, the surge in coverage reflects the steady growth of India’s life insurance sector, which has recorded a compound annual growth rate (CAGR) of around 13 per cent over the last 20 years.

The report noted that the expansion of the life insurance sector has broadly mirrored India’s overall economic growth. During the same period, GDP at market prices grew at an average rate of about 12.4 per cent.

Growth in the sector has been supported by rising demand for group insurance, product innovation, personalised insurance offerings, and stronger distribution networks, particularly in the individual insurance segment.

Despite the increase in coverage, India continues to be an underpenetrated insurance market. Life insurance penetration stood at just 2.8 per cent in 2023, significantly lower than the average of around 5.6 per cent in developed economies.

Insurance density in India was also modest at $70 in 2023, underlining the wide gap between India and global peers, the report said.

Concerns Over Adequate Protection

The report highlighted that while the number of insured individuals has increased, many policies still carry low sums assured. As a result, critical risks such as death protection and retirement income remain inadequately covered.

It added that although policy renewals showed improvement in FY25, the long-term impact of the sector will depend on providing meaningful protection and dependable pension products, rather than merely expanding the number of policyholders.

India’s life insurance market remains highly concentrated, with the top five insurers accounting for more than 85 per cent of total premium income.

Life insurance continues to dominate the country’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 Rs 8.85 lakh crore during the year, the report said.

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