India’s general insurance sector is set to experience significant expansion, with a projected growth rate of 11.2% for 2024. This growth trajectory will elevate the sector’s market size from $40.4 billion in 2024 to $57.3 billion by 2028, representing a compound annual growth rate (CAGR) of 9.9%, according to a recent report by GlobalData.
Swetansha Chauhan, Insurance Analyst at GlobalData, highlighted that the sector sustained its impressive growth in 2023, achieving a 13.2% increase. This progress was driven by economic advancement, growing disposable income, increased consumer awareness, and strong regulatory support. Chauhan anticipates this momentum to continue into 2024 and 2025.
In the upcoming fiscal year, the industry’s expansion will be largely fueled by three key segments: personal accident and health (PA&H), motor, and property insurance. Collectively, these segments represented 93% of general insurance premiums in 2023.
The PA&H sector is expected to remain the largest segment, constituting 39.5% of general insurance gross written premiums (GWP) in 2024. It is projected to grow by 14.5% due to increased health awareness and rising medical expenses following the COVID-19 pandemic. PA&H insurance is forecasted to grow at a CAGR of 12.5% from 2024 to 2028. Supportive regulatory actions, including the proposed establishment of a healthcare regulator by the Indian government and the introduction of the ‘Bima Sugam’ electronic marketplace by the Insurance Regulatory and Development Authority of India (IRDAI), are anticipated to further strengthen this segment.
Motor insurance, the second-largest segment, is projected to account for 31.1% of general insurance GWP in 2024, with a growth rate of 10.4%. This rise is attributed to increased vehicle sales, which saw a 12.5% uptick in March compared to the previous year, and the government’s vehicle scrapping policy effective from April 2023, which mandates the scrapping of private cars older than 20 years and commercial vehicles over 15 years old. Motor insurance is expected to grow at a CAGR of 7.9% through 2028.
Property insurance is forecasted to hold a 22.5% share of general insurance GWP in 2024, growing at a rate of 10.4%. The sector benefits from heightened infrastructure investments, supported by a substantial 11.1% increase in the government’s budget allocation for infrastructure to $134 billion for the 2024-2025 period. Property insurance is projected to grow at a CAGR of 8.3% up to 2028.
Liability, Marine, Aviation, and Transit (MAT) insurance, along with other general insurance products, are expected to represent the remaining 6.8% of general insurance GWP in 2024.
Chauhan concluded that the economic recovery and rising disposable income will continue to bolster the growth of India’s general insurance industry over the next five years. Government initiatives and favorable regulatory reforms are expected to enhance insurance penetration, which currently stands at 0.98% in India compared to higher rates in other Asian markets such as Japan (1.75%), South Korea (1.46%), Hong Kong (1.65%), and China (1.26%).
