A Study on the Growth and Overview of Insurance Sector in India.

Journal of Research and Development A Multidisciplinary International Level Referred and Double Blind Peer Reviewed, Open Access ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-11(I)| November 2025 164 A Study on the Growth and Overview of Insurance Sector in India. Dr. Devidas Ambadas Gawai Dr. Ambedkar College of Commerce And Economics, Wadala, Mumbai Manuscript ID: JRD -2025-171134 ISSN: 2230-9578 Volume 17 Issue 11 (I) Pp. 164-169 Nov. 2025 Submitted:15 Oct. 2025 Revised: 25 Oct. 2025 Accepted: 10 Nov. 2025 Published: 30 Nov. 2025 Abstract The insurance market in India has seen significant development since the period of 2000. At one time the sector was highly regulated and dominated by the public sector such as the Life Insurance Corporation of India (LIC), but today there are 44 insurers in the country with 21 in life insurance and 22 in non-life insurance segments. The present research is conducted to review the growth and development of insurance sector in the country. The research is based on the available published data on the subject. There are plenty of statistical data published by IRDAI and Insurance Council and hence there was no problem of availability of data. The findings of the research revealed that the insurance industry in India ranks 9th in the world in Life insurance and ranks 14th in the non-life insurance. The insurance market which was highly dominated by public sector has transformed from monopolist market to the oligopoly type of market. Insurance penetration in India is 4 percent (3 for life & 1 for non-life) which is increasing slowly but much lower than the global standards of 6.8 per cent. The insurance density is 92 USD (70 USD for life & 20 USD for non-life) which is also significantly much lower than global benchmark of 874 USD. In the life insurance segment LIC is the market leader with a share of 59%, followed by SBI (Life) 10% and HDFC life at 8%. In the non-life segment, New India Insurance has the highest market share of 13%. However, there is bright potential for the insurance market in view of the low penetration and low density of insurance in the country. The insurance sector is poised for rapid growth & development due to the favourable demographic, technological factors and economic factors such as rising disposable income, higher standard of living, higher economic growth, rapid urbanisation and so on. Keywords: Life Insurance, Non-Life Insurance, Insurance density, Insurance Penetration, IRDA. Introduction: • Present Trends in the Insurance sector: The insurance sector in India has witnessed significant changes during the last two decades especially after the announcement of the new economic policy in the year 1991. India ranks ninth in the world in life insurance and 14th in non-life insurance. The insurance market consists of life insurance and non-life insurance. Life insurance accounts for 70 percent of the total market share of the insurance industry & non-life insurance accounts for 30 percent share. The non-life insurance includes segments like health insurance, fire insurance, motor insurance, marine insurance etc. Indian insurance sector has 22 companies in the Life insurance & 21 companies in the non-life insurance. The number of registered insurers in India can be seen as below. Type Public Private Total Life Insurance 1 21 22 Non-Life Insurance 6 15 21 Reinsurance 1 - 1 Total 8 36 44 Source: IRDAI Reports. It can be seen from the above table that is 44 insurers in the county which include 08 under the public sector (Life & non-life) & 36 under the Private sector. Quick Response Code: Website: https://jrdrvb.org/ DOI: Creative Commons (CC BY-NC-SA 4.0) This is an open access journal, and articles are distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Public License, which allows others to remix, tweak, and build upon the work noncommercially, as long as appropriate credit is given and the new creations ae licensed under the idential terms. Address for correspondence: Dr. Devidas Ambadas Gawai, Dr. Ambedkar College of Commerce And Economics, Wadala, Mumbai-31. How to cite this article: Devidas Ambadas Gawai(2025). A Study on the Growth and Overview of Insurance Sector in India. Journal of Research & Development, 17(11(I)), 164-169. Original Article Journal of Research and Development A Multidisciplinary International Level Referred and Double Blind Peer Reviewed, Open Access ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-11(I)| November 2025 165 At one time LIC had the monopoly in the life insurance segment but today the market has transformed into oligopoly type of market. • Growth Drivers of Insurance sector: The growth drivers of the Indian insurance market are: 1. High economic growth rate 2. Rising disposable income 3. Covid-19 the Pandemic 4. Increased awareness of health 5. Large size of population 6. Young population with median age of 28 years 7. Technological advancement 8. Tax benefits and investment incentives 9. Product diversification with unit Linked Insurance plans (ULIPs) 10. Government Initiatives such as  Pradhan Mantri Fasal Bima Yojana  Pradhan Mantri Suraksha Bima Yojaria  Pradhan Mantri Jeevan Jyoti Bima  National Export Insurance Account Scheme  Ayushman Bharat  Issues and Challenges: Despite the rapid growth of the insurance sector there are various issues and challenges faced by it. These are. 1. Low insurance Penetration & density 2. Lack of trust of the buyers in insurance purchasing 3. Regulatory Challenges 4. Higher distribution costs 5. Under insurance coverage 6. Fraudulent claims and mis-selling 7. Stiff market competition 8. Shortage of trained personnel 9. Lack of awareness about the insurance products 10. Claim settlement issues  Prospects of Insurance sector: The Indian insurance sector has great potential for further expansion and development in the country with population of 1400 million the insurance penetration offers vast untapped insurance coverage. The insurance sector is dominated by the public sector in life as well as non-life and hence the scope of the private sector has not been fully realised. There is good future potential for life as well as non-life insurance in the country.  Objectives Of The Research: The major objectives of the research are: 1. To find the present status of the insurance industry in the country. 2. To assess the insurance penetration and insurance density in India. 3. To ascertain the market share of different insurers in life & non-life insurance segments. 4. To investigate the major challenges faced by the insurance sector and the future growth potential for it.  Review of Literature: The review of the literature undertaken for the present research can be seen as below. 1. Saon Ray (2020) analysed the Indian insurance sector and the growth of this sector. The insurance industry is growing at the compound rate of 16.50 percent. The insurance penetration is 3.69 percent and insurance density are 73 USD in the year 2017-18. The Indian insurance market consist of 59 companies which include 24 life insurance and 35 non-life insurance. The share of life insurance is much higher than non-life at 75 percent & 25 percent respectively. 2. The major challenges faced by the insurance sector are low penetration & low density as compared to global standards, focus in urban areas, domination of the public sector insurers, lack of capital, overcrowding in few segments, domination of traditional distribution channels & so on. 3. Madan Mohan Dutta (2020) elaborated on the health insurance sector in the country. Health insurance contributes maximum to the general insurance at 29 percent of insurance premium. The research revealed that there is a close relationship between the level of premium earned by the insurer and the underwriting loss. The overall premium of the health insurance has increased significantly but it has not contributed to the higher profitability of the insurance Journal of Research and Development A Multidisciplinary International Level Referred and Double Blind Peer Reviewed, Open Access ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-11(I)| November 2025 166 firms but contributed to the higher underwriting losses over the period. There has been rapid rise in the income of the insurer at 27 percent but still the health insurance companies are unable to make underwriting profit. 4. Dr. G P Dang and Dr Divya Ghai (2010) highlighted the reforms introduced in the insurance sector in the country. The government allowed private sector to enter into the sector. This resulted in the rapid expansion in the number of insurance companies, the availability of infrastructure fund and better services to the customers. 5. Some of the issues faced by the insurance sector are lack of awareness about the insurance, low penetration in the rural areas, neglect of people below the poverty line, unsatisfactory customer services and so on. 6. Nirjhar Majumdar (2023) analysed the impact of changing demography on the Indian insurance sector. The median age of India is 28 years while that of China is 38 years, Japan 48 years. Hence there is greater potential for the youth to purchase insurance at a much-reduced premium amount. This is good for the insurance companies to market large number of insurance policies. Maharashtra and UP have the maximum number of insurance policies because of the higher size of population in these states. The other factors which can contribute to a greater number of insurance policies are rising per capita income, higher level of literacy and higher life expectancy etc. 7. Aniket Kulkarni (2023) investigated the contribution of insurance sector to the Indian economy. The establishment of IRDA has contributed significantly to the attraction of foreign capital, greater market competition, consumer protection and the growth of the industry. The insurance sector has reduced risks and maintain stability, protection of wealth, creation of employment opportunities, infrastructure development, higher trade & commerce, economic stability and so on. 8. Hiren Nandlal Joshi (2023) analysed the growth and development of the insurance sector in the country and its problems and prospects. The insurance sector consists of life insurance and the non-life insurance. LIC is one of the oldest life insurance companies & it dominates the market. It has collected maximum insurance premium & sold the highest number of policies than any other private insurer. In the insurance sector agents play an important role in the distribution or selling of insurance policies. There is also a growing trend of digital channel or the online selling of insurance policies. The entry of private sectors in the insurance sector has resulted in stiff market competition and diversification of insurance products.  Research Methodology: The research methodology adopted for the research can be seen as below. 1. Nature of Research Design: The research design most be suitable to this type of research is the descriptive research design and the explanatory research. Such research design is useful in presenting the status of the insurance sector in the simplest manner. 2. Sources of Data: The present research has mainly relied on the available published or secondary data including the review of the literature on the insurance industry. There is plenty of data available on the subject published by IRDAI and the insurance council of India. 3. Data Analysis: The data analysis being conducted in the present research is descriptive data analysis. It uses simple percentage share in the analysis of the data. Tables and charts are presented for explanation & clarity of the data. Each table provides interpretation of the data. 4. Limitations of the Research: Some of the limitations of the research are: a. The research has focused on the quantitative aspects of the problem at hand and not on the qualitative aspects. b. The research is based on the review and analysis of the secondary data only. It has not taken primary data for analysis. c. The research has not considered the working of the individual companies and their profitability & performance. d. The research focuses only on few macro variables of the insurance sector & not all aspects of this sector.  Data Analysis: The details regarding data analysis can be seen from the following tables and charts. 1. India's Insurance in Global Ranking: The ranking of the Indian insurance sector in the world can be seen from the following table. Table No. 1 India's Insurance in Global Ranking Rank Country Premium (Billion USD) 1 US 2960 2 China 698 3 UK 363 4 Japan 338 5 France 261 6 Germany 242 7 South Korea 183 Journal of Research and Development A Multidisciplinary International Level Referred and Double Blind Peer Reviewed, Open Access ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-11(I)| November 2025 167 8 Canada 171 9 Italy 160 10 India 131 Source: Swiss Re Sigma Report 2022 It can be seen from the above that US ranks first in the world in insurance premium with 2960 billion USD. It is followed by China (rank two) with 698 billion USD which is only 24 percent of the US market size. India ranks tenth in the global insurance market with 131 billion USD insurance premium collection. 2. Insurance Penetration: The insurance penetration (which is premium as a percentage share of GDP) in India for life & non-life can be seen from the table below. Table No. 2 Insurance Penetration in India Year Life % Non-Life % Total % 2016 2.7 0.7 3.4 2020 2.8 0.9 3.8 2021 3.1 1 4 2022 3.2 1 4 2023 3 1 4 Source: IBEF Report 2024 It can be observed that insurance penetration in India is only 4 percent (3% for life & 1% for non-life). The global benchmark is 2.8% for life and 6.8% for non-life or 6.8%. 3. Insurance Density: The insurance density in India can be seen from the table below. Table No. 3 Insurance Density in India Year Life (USD) Non-Life (USD) Total (USD) 2015 44 11 55 2020 58 19 77 2021 59 19 78 2022 69 19 88 2023 70 22 92 Source: IBEF 2024 Report 2960 698 363 338 261 242 183 171 160 131 0 1000 2000 3000 4000 US China UK Japan France Germany South Korea Canada Italy India 1 2 3 4 5 6 7 8 9 10 India's Insurance in Global Ranking 2.7 2.8 3.1 3.2 3 0.7 0.9 1 1 1 0 2 4 2016 2020 2021 2022 2023 Insurance Penetration in India Life Non-Life Journal of Research and Development A Multidisciplinary International Level Referred and Double Blind Peer Reviewed, Open Access ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-11(I)| November 2025 168 It can be seen from the above table that insurance density in India which was 55 USD in 2015 increased to 92 USD in 2023. The global benchmark is 874 USD.Thus India is far behind the global benchmark in the insurance density. 4. Life Insurance Market share by Premium: The life insurance market share based on the premium collected in the year 2024 for top few insurers can be seen from the following table. Table No. 4 Life Insurance Market share of Top Few Companies Rank Name of the Insurer Market Share 1 LIC 59 2 HDFC Std Life 8 3 SBI Life 10 4 ICICI Prudential 5 5 Others 18 Total 100 Source: IRDAI Report 2024 It can be seen from the above table that LIC holds the largest market share of 59% in life insurance premiums. The other top insurers are SBI Life with 10% market share, HDFC life with 8% market share & ICICI prudential with 5% market share. Remaining all other insurance companies (17 insurer combined) have a market share of only 18 percent. LIC had once the market share of more than 90 % and it was the most dominant insurer in the country. Today its market share has declined but it is still the most dominant player of the life insurance sector in the country. 5. Non-Life Insurance Market share by Premium: The details regarding the market share of non-life insurance market based on the premium collected in the year 2024 can be seen from the following table. Table No. 5 Non-Life Insurance Market Share based on Premium Collected Sr. No. Name of the Insurer Market Share 1 New India Insurance 13 2 ICICI Lombard 9 3 Bajaj Allianz 7 4 United India 7 5 Oriental Insurance 6 6 HDFC Ergo 6 7 Others 52 Total 100 44 58 59 69 70 11 19 19 19 22 0 50 100 2015 2020 2021 2022 2023 Insurance Density in India Life (USD) Non-Life (USD) 59 8 10 5 18 Market Share Journal of Research and Development A Multidisciplinary International Level Referred and Double Blind Peer Reviewed, Open Access ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-11(I)| November 2025 169 Source: IRDAI Report 2024 It can be seen from the above table that New India Insurance has the maximum market share in non-life insurance accounting for 13 percent of the total. The other leading companies are ICICI Lombard with 9% market share, Bajaj Allianz with 7% market share, United India with 7% market share, Oriental Insurance with 6% market share and HDFC Ergo with 6% market. Others 15 insurer have a combined market share of 52% of non-life insurance. Summary And Conclusion: The following conclusions are drawn from the above research on the insurance industry. 1. Insurance industry in India has witnessed significant development & transformation during the last two decades. It is the result of favourable government initiatives such as economic liberalisation, establishment of Insurance Regulatory & Development Authority, privatisation of the insurance sector, Ayushman Bharat, digital India and so on. 2. The insurance sector consists of 22 insurers in the life insurance, 21 insurers in the non-life segment and 01 insurer in reinsurance making a total of 44 insurance companies. Thus, the market structure of the insurance sector has changed from monopoly type to oligopoly. 3. The life insurance penetration in Indian is 3% & non-life 1% making a total of 4% as against the global benchmark of 6.8%. The life insurance density is 70 USD & non-life 20 USD making a total of 92 USD which is also very low as compared to the global average of 874 USD. 4. The top four players in the life insurance segment are LIC (59%), SBI life (10%), HDFC life (08%), and ICICI prudential (5%). The top six non-life insurers are New India Insurance (13%), ICICI Lombard (9%), Bajaj Allianz (7%), United India (7%), Oriental insurance (6%). HDFC Ergo (6%). Thus, the share of public sector in the life insurance is 59%, while that of private sector 41%. On the other hand, in case of non-life insurance the share of the public sector is 26% & that of private sector is 74%. Thus, in the life insurance the public sector dominates while in non-life insurance the private sector dominates. 5. The insurance sector in India is poised for greater transformation due to various factors such as favourable demographic, technological adoption, urbanisation, rising disposable income, economic factors, greater awareness about the health, young population, government initiatives like Ayushman Bharat, & so on. Thus, the insurance industry is poised to become a global powerhouse in the years to come. References: 1. Saon Ray, Vasundhara Thakur, India's Insurance sectorchallenges and opportunities, Indian Council for Research on International Economic Relations, July 2020. 2. Madan Mohan Dutta, Health Insurance Sector in Indiaan analysis of its performance, Vilakshan XIMB Journal of Management, December 2020. 3. Dr G P Dhang and Dr Divya Ghai, The Indian Insurance Sectorchallenges and opportunities, IJBEMR, vol 1, Issue 2, December 2010. 4. Nirghar Majumdar & others, Changing Demography should help Indian life Insurer to grow, The Journal of Insurance Institute of India, Vol 10, Issue 3, Jan-March 2023. 5. Aniket Kulkarni & others, Study of Insurance & its contribution to Indian economy, International Journal of Research publication & Reviews, Vol 4, Issue 10, October 2023. 6. Hiren Nandlal Joshi & Dr. Manohar Karade, The Indian Insurance Industrychallenges and prospects, International Journal of Research Publications & Reviews, Vol 4, Issue 12, December 2023. 010 20 30 40 50 60 New India Insurance ICICI Lombard Bajaj Allianz United India Oriental Insurance HDFC Ergo Others Non-Life Insurance Market Share on Premium Collected