Total premium for life insurance has been growing at a CAGR of 10.3 per cent since 2007-19
A recent report by Care Ratings — Indian Life Insurance Industry – Navigating a Choppy 2020 states that while global share of life insurance premiums stood at 46 per cent in 2019, it was 75 per cent in India for 2018-19.
The report also revealed that the total premium for life insurance stood at Rs 508,132 crore in 2018-19 and has been growing at a Compound Annual Growth Rate (CAGR) of 10.3 per cent since 2007-19 when it was Rs 156,076 crore.
It has attributed the double digit growth in the industry to factors like 1) rising household savings or income levels, 2) increasing education or awareness level, 3) rise of middle class, 4) tax benefits, 5) product innovations or customization by insurance companies, and 6) entry of multiple distribution channels.
The report further states that out of the total premium, "85 per cent is non-linked premium, while balance is linked premium. Non-linked premium is dominated by LIC, while the private insurers hold a larger share in linked premium (due to ULIP products)."
The shift in the premium market share can be attributed to several structural and regulatory changes.
"The private players underwent transformation leading to increased penetration, higher coverage, rise of multiple channels (including agency, bancassurance, broking, direct, corporate agency), superior reach, and intensifying competitiveness in the market." the report says.
Talking about insurance penetration, it has been reported that penetration in India is well below the global average.
The insurance penetration reported in 2016-17 was 2.82 per cent as compared to other countries and a global average of 3.33 per cent.
At $55 in 2015-16, the insurance density in India also remains very low as compared to the global average.