India beats China and Thailand in insurance sector, figures growing fast

India has achieved great success in the insurance sector. The insurance sector in India is growing rapidly. The country's insurance sector has achieved a CAGR growth of 11 percent during FY 2020-23.

India Insurance Sector: India has achieved great success in the insurance sector. The insurance sector in India is growing rapidly. The country's insurance sector has achieved a CAGR growth of 11 percent during FY 2020-23. On the basis of this growth, the insurance sector has also left countries like China and Thailand behind.

India's insurance sector growing rapidly

According to a latest report, the insurance sector has registered a GWP of over $130 billion, which is higher than Thailand and China. Compared to India, the growth for the insurance sector in China and Thailand was less than 5 per cent. According to a latest report by global management-related consulting firm McKinsey & Company, the life insurance industry is expected to grow 11 per cent year-on-year to $107 billion by 2023.

India's sector in a better position

The general insurance industry grew 15 per cent year-on-year to reach $35.2 billion. According to the report, favorable conditions in insurance and other related sectors are in a better position for the industry to move forward. In addition, the Insurance Regulatory and Development Authority of India (IRDAI) has created regulatory interventions to simplify the customer journey and introduce digital innovation. On the other hand, the emergence of private players has transformed operational efficiency, technology and investment.

The number of insurance holders is increasing

The report said insurers are in a position to increase their market share, however, they face several challenges in attracting capital and sustaining growth. Despite the regulator's target of insurance for all by 2047, the industry's penetration rate declined from 4.2 per cent in 2022 to 4.0 per cent in 2023, indicating that its progress has not been on par with the country's economic growth.

What are the challenges

The report also noted that despite achieving a CAGR of 17.2 per cent in new business premium, India's top five private life insurance companies have registered a CAGR of less than 2 per cent in net profits in the last five years. It illustrates a gap between product innovation, distribution efficiency and renewal management.