BFSI - Insurance

• India's share in global non-life insurance market was ~1% in 2022.
• The gross direct premium of non-Life insurers (within and outside India) registered YoY growth of 16.4%, primarily driven by health and motor segments. The net incurred claims of non-Life insurers stood at INR 1.49 Lakh Cr in FY23, primarily driven by rising per capita income, product innovations and customization, development of strong distribution channels, and rising financial literacy.
• The insurance penetration of life insurance sector has gone up from 2.2% in FY02 to 3% FY23
• The insurance penetration of non-life insurance sector has gone up from 0.5% in FY02 to 1% FY23
• The life insurance density has gone up from $9.1 in FY 02 to $70 in FY23
• The non-life insurance density has gone up from $2.4 in FY02 to $22 in FY22 and remained stable in FY23
• Life insurance industry recorded a total written premium income of INR 7.83 Lakh Cr in FY23, registering growth of 12.98% over FY22. The private sector insurers posted 16.34% growth in premiu
• In FY 22, new business and renewal premium accounted for 4744% and 52.56% of the total premium received by life insurers, respectively
• The traditional products registered a growth of 14.40% in FY 22, with premium of INR 6.77 Lakh Cr.
• Unit-linked products (ULIPs) registered a growth of 4.61% 
• In FY23, the life insurance industry issued 28.47 Mn new policies
• Non-life insurance industry underwrote total direct premium of INR 2.57 Lakh Cr in FY 23, registering a growth of 16.4% from FY 22
• The Indian health insurance industry reported a growth of 21.32% in FY 23, making it the largest non-life insurance sub-segment 
• Fire segment also recorded positive growth of 11.07% in FY23
• The general and health insurers have issued 26.6 Mn policies in FY23, reporting an increase of 0.08%
• The number of insurance policies issued to women in the year 2022-23 is around 9.7 Mn which is 34.20% of 28.4 Mn total policies as against a share of 34.7% in 2021-22
• The total mortality protection gap in India stands at $40.4 Bn (in premium equivalent terms) as of 2021 with an estimated protection gap of 91% of total protection need. This offers a huge opportunity to life insurers with an estimated additional life premium opportunity of average $78.2 Bn annually over 2020-30

Regulatory Landscape

• The insurance regulator IRDAI has also undertaken various initiatives towards boosting the insurance penetration, such as permitting insurers to conduct video-based KYC, launching standardized insurance products and allowing insurers to offer rewards for low-risk behaviour
• IRDAI has taken up the mission of ‘Insurance for All’ by 2047 which is expected to lead to a significant increase in insurance penetration and would help in bolstering the ease of doing business and will aid in making the sector more investment-friendly
• IRDAI has “engaged four mission-mode teams” to work on transition to a risk-based solvency regime from current regime of capital or factor-based solvency, with the aim of beginning the shift within two years
• IRDAI has allowed PE funds to directly invest in insurers, allowed promoters to dilute up to 26% stake & dispensed with its approval for raising capital such as subordinated debt and preference shares
• The IRDAI constituted a working group on standardization of Cyber Liability Insurance. IRDAI issued a guidance document on Product Structure for Cyber Insurance
• Bima Sugam: A digital platform for insurance products & services, launched as an initiative by the IRDAI to connect and empower all insurance stakeholders and cater to all insurance needs under one roof