India's life insurance sector has seen rapid growth over the past decade with the number of individuals covered increasing from 150m in FY15 to nearly 400m in FY25.
A report by CareEdge Ratings has stated that the growth was driven by increasing demand for group and credit-linked insurance products. The country’s life insurance sector has recorded a compound annual growth rate of 13% over the last two decades. The report further states that rising demand for group insurance, product innovation, customised offerings and the strengthening of distribution networks — particularly in individual insurance — have supported this growth. Insurance density is at $70, highlighting the substantial gap between India and global peers.
The sector’s growth has broadly tracked India’s economic expansion, with GDP at market prices growing at an average rate of around 12.4% during the same period. India remains significantly underpenetrated insurance market with life insurance penetration at 2.8% in 2023, well below the average of around 5.6% in developed economies. Life insurance contributed 74% of total premiums in FY25, compared with a global average of about 41%.