The Insurance Brokers Association of India (IBAI) celebrated its 24th Foundation Day today and launched its report titled 'Leading the Path to Insurance for All: Broker of the Future,' developed in partnership with McKinsey & Company.
The report was unveiled by Hon’ble Shri C.P. Radhakrishnan, Governor of Maharashtra, in Mumbai.
The report highlighted that India’s insurance sector is projected to more than double from INR11tn in 2024 to INR25tn ($300bn) by 2030. It also noted that insurance penetration in India could rise from 3.7% to 5%, moving closer to the global average of 6.8%.
The report highlighted key insights such as:
- Many affluent and high-net-worth individuals recognize the need for significant life insurance coverage, but fewer have it, while most micro and small enterprises buy insurance mainly due to regulations or client demands.
- Insurance purchases are largely trust-driven: affluent clients rely on advisors, while mass market customers lean on friends and family recommendations.
- Claims experience greatly influences customer loyalty, with many affluent clients considering switching insurers due to poor claims handling, and a majority of SMEs facing claim rejections and needing help with paperwork.
One of the growth drivers mentioned in the report was that India faces a critical challenge in bridging its 91% protection gap, particularly among mass-market customers and SMEs who are most vulnerable to risk losses. Despite being the world’s fourth-largest economy, insurance penetration remains low: only half of Indians over 18 have life insurance and just 40% have health insurance, dropping to 25% excluding government schemes. Life insurance penetration stands at 2.8%, with a large gap due to limited use of pure term policies. Furthermore, although 65% of the population lives in rural areas contributing 45% of GDP, only about 2% of life insurance branches operate there, highlighting a major access gap.
“India’s insurance sector is entering a new era of opportunity, with the potential to more than double by 2030. The growth, however, needs to be secured by fast focus on bridging the massive 91% protection gap that exists in the country. At this moment, brokers have a strategic inflection point. Moving away from merely intermediaries, brokers are becoming trusted advisors that will translate awareness into action and build trust in underserved markets. Regulations permitting, with access to growth capital and investments in digital capabilities, brokers would be able to scale, drive inclusion, and form the bedrock of India's journey toward 'Insurance for All' by 2047. This empowerment must begin now,” IBAI president Narendra Bharindwal said in a press release statement.