India’s life insurance market is projected to surge at 10.5% annually over the next decade, significantly outpacing the global average of 5% according to a report The Allianz Global Insurance Report 2025 by Allianze Global Insurance in May 2025.
- This growth is fueled by a robust economy and supportive government policies.
- The Indian market is poised to become the second largest in Asia, surpassing Japan as India’s life insurance sector is set to grow at a compound annual growth rate (CAGR) of 10.5% over the next decade.
Key Highlights:
i.The report stated that most of the growth will be in the life segment, adding that more than half of the additional premium pool will be generated in Asia, with China leading the segment.
ii.China is followed by North America and Europe, but India is likely to grow at a much faster rate.
- Although China is expected to lead the region in absolute growth at 7.8% annually, India is poised to emerge as the fastest-growing economy with a projected annual growth rate of 10.5% over the next decade from 2025 to 2035.
- Also, the Property and Casualty (P&C) Insurance segment in the global insurance sector will grow by 4.5% per year until 2035.
iii.The report has also mentioned that the life insurance sector will get benefitted from higher interest rate and expected to grow at a Compounded Annual Growth rate (CAGR) of about 5.0% over the next decade.
iv.India’s entire insurance market (across all segments) expanded by 10.6% in 2024, up from 7.7% in the previous year 2023, with premium income touching USD 145 billion. Health insurance, although still the smallest segment, led this surge with a remarkable 20.8% growth. Life insurance, holding almost 75% of the market, experienced robust growth of 10.6%, increasing from 7.7% in 2023.
India’s Insurance Sector Reforms:
i.To tap into the global insurance growth momentum, India has increased the Foreign Direct Investment (FDI) limit in insurance from 74% to 100%, positioning itself to benefit from the sector’s projected 10.5% annual growth over the next decade.
ii.In the previous fiscal year, Indian Public Sector General Insurance Companies (PSGICs) witnessed a major turnaround, with all of them having become profitable again after historical losses.
- One of the main reason behind this is, Government infused Rs. 17,450 crores into PSGICs between 2019-20 and 2021-22 to support reforms, improve efficiency, and drive profitability.