Economic Survey 2024: India On Track To Become A Leading Insurance Market

The Economic Survey 2024 highlights that the overall insurance density in India has increased from USD 91 in FY 2022 to $92 in FY 2023. This growth indicates a rise in the per capita premium for the country, which is calculated by dividing the total insurance premium by the population. Specifically, the insurance density in the life insurance segment grew from USD 69 in 2022 to $70 in 2023, while it remained stable in the non-life insurance segment.

Factors Driving Market Growth

The Indian insurance market has experienced significant growth due to factors such as a growing middle class, innovation, and regulatory support. Despite a slight dip in premium growth in FY 2024 compared to FY 2023, attributed to post-Covid-19 adjustments, the market shows robust potential for the future. However, overall insurance penetration decreased from 4.2 per cent in FY 2022 to 4 per cent in FY 2023, indicating a need for deeper insurance inclusion to safeguard the financial well-being of the population.

Health Insurance Sector Performance

Health insurance premiums exhibited the fastest growth among all non-life insurance segments, with an 11 per cent increase in FY 2023, as noted in the Economic Survey 2024. This growth underscores the rising importance of health insurance in the Indian market.

Ayushman Bharat Initiative

The survey also reports significant progress under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), which has generated 34.2 crore Ayushman cards across India, with 49.3 per cent of them held by females. This initiative aims to provide comprehensive health coverage to a large segment of the population.

Regulatory Reforms and Innovations

Regulatory changes have facilitated the introduction of new insurance products, especially in the health insurance segment. The transition from the ‘Use and File’ method to the ‘File and Use’ regime has resulted in faster approvals, enabling insurers to respond more swiftly to market demands. Additionally, the mandatory issuance of a concise Customer Information Sheet (CIS) with all health insurance policies aims to empower policyholders by enhancing their understanding of policy coverage, thereby boosting confidence in health insurance products.

The Road Ahead 

While our economic indicators show promising growth, we must address the gap in insurance coverage across the nation, particularly in the health insurance sector. “Expanding access to affordable insurance products will not only protect individuals and families from unforeseen financial shocks but also contribute to the overall stability and resilience of our economy,” says Sarbvir Singh, Joint Group CEO, PB Fintech, a financial technology company. 

“The survey called for targeted policies to increase insurance penetration, particularly in underserved rural areas, and encouraged collaboration between the government and private sector to innovate and promote inclusive insurance solutions,” he adds.