Insurance Penetration and Density
Insurance penetration, measured as the percentage of insurance premium to GDP, and insurance density, calculated as the ratio of premium to population, are indicators of the insurance sector's development.
Foreign Direct Investment in Insurance
The Indian insurance sector has attracted significant foreign direct investment (FDI) in recent years. The government has liberalized FDI norms, increasing the permissible limit from 26% in 2014 to 49% in 2015 and 74% in 2021. For insurance intermediaries, the FDI limit was raised to 100% in 2019.
Growth of the Insurance Sector
As a result of FDI inflows, the number of insurance players in India has increased from 53 in 2013-14 to 70 in 2022-23. Insurance penetration has also risen from 3.9% to 4%, while insurance density has increased from USD 52 to USD 92 during the same period.
Key Metrics
Asset Under Management (AUM) in the insurance sector has nearly tripled since 2013-14, reaching Rs 60.04 lakh crore. Total insurance premium has also more than doubled, from Rs 3.94 lakh crore to Rs 10.4 lakh crore.
Foreign Investment in the Insurance Sector
Foreign companies have played a significant role in the growth of the Indian insurance sector. The recent Zurich Insurance-Kotak General Insurance deal, where Zurich Insurance acquired a 70% stake in Kotak Mahindra General Insurance, is a notable example of FDI in the sector.