Today: 1 March 2025
17 November 2024
2 mins read

India Tops Insurance Growth Charts  

A growing middle class, greater awareness, rising healthcare costs, and supportive regulations have combined to offer high growth for India’s insurance industry over the last few years…reports Asian Lite News 

India’s insurance sector clocked a robust 11 per cent compound annual growth rate to cross the $130 billion mark during FY2020-23, surpassing Asian peers China and Thailand, which grew at less than 5 per cent, according to a McKinsey report.  

The report. titled ‘Steering Indian Insurance from Growth to Value in the Upcoming Techade’, said that while the country’s life insurance industry grew to $107 billion as of 2023, the general insurance industry touched $35.2 billion. 

A growing middle class, greater awareness, rising healthcare costs, and supportive regulations have combined to offer high growth for India’s insurance industry over the last few years, the report added. 

However, there is immense growth potential as a significant portion of the Indian population and insurable assets remain uninsured, increasing the risks of high out-of-pocket expenses, adding to the overall economic strain, and undermining the industry’s ability to bring full benefit to society. 

Affordable private health insurance coverage could also reduce the strain on government healthcare, potentially freeing government funds to improve healthcare infrastructure, the report pointed out. 

The McKinsey report also highlights that insurers’ ability to drive value has been impeded by challenges, including the inability to generate sufficient returns and manage operational efficiencies. Despite the regulator’s target of ‘Insurance for All by 2047,’ the industry’s penetration rate has slipped from 4.2 per cent in 2022 to 4 per cent in 2023, indicating that its progress has not been on par with India’s economic growth, the report added. 

According to the McKinsey report, despite a decline in claims ratios, a steady increase in expense ratios among traditional players (until 2023) pushed the combined ratio upwards. “Improvement in leading productivity metrics, such as operating expenses per life or policy, has been negligible over the past two to three years for both life and general insurance companies,” it points out. 

Peeyush Dalmia, Senior Partner, McKinsey & Company, said, “While current growth indicators are promising, the insurance industry has not seen improvement in productivity. Achieving long-term success requires a fundamental transformation in how insurance products are designed, distributed, and serviced.” 

The industry stands at an inflection point, and Insurance companies that successfully implement these changes while ensuring focus on profitability will be well-positioned to capture the significant growth opportunities ahead, he added.

ALSO READ:   Uber Eyes Bigger Growth in India 

Previous Story

Anupriya holds talks with Saudi Health Minister 

Next Story

India’s Economy Hits Sweet Spot: Moody’s

Latest from Business

Lulu Add News Store at Satwa 

Majid Saqer Almarri, CEO of Dubai Land Department inaugurated the new hypermarket in the presence of Yusuff Ali M.A., Chairman of Lulu Group and other dignitaries.  Lulu has officially opened the doors

Lulu expands footprint in Al Ain 

Lulu Retail Holdings is set to expand its presence in Al Ain with a new hypermarket at the upcoming Al Ain Community Centre in the Al Jimmi area.  Lulu Retail Holdings, the

Danube Unveils Convertible Apartments in Dubai

TIMEZ by Danube introduces a unique concept where studio apartments can be converted into 1-bedroom units, and 1-bedroom units into 2-bedroom configurations, providing adaptable solutions for growing families or changing lifestyles. Dubai-based
Go toTop

Don't Miss

Auto Giants Forge Software Partnership in India

The JV will commence operations with 100 employees and intends

Campaign For Uyghurs Condemns CCP Centenary

The CFU sees CCP as “a brutal regime that is