Indian Health Insurance Sector Will Be Bigger Than US Market By 2047: Industry Leaders

Industry leaders and experts on Saturday said that India’s insurance sector is set for exponential growth and could possibly surpass the US market by 2047.

Speaking at the Bangalore Chamber of Industries and Commerce (BCIC) Insurance Summit 2024, Geetanjali Kirloskar, CMD, Kirloskar Systems, and Chairperson, Toyota Tsusho Insurance Broker India, cited a projection that affluent households with annual incomes of over Rs 20 lakh that can afford a good comprehensive health insurance policy will go from 2.6 per cent covering 37 million individuals to 11 per cent in 2031, covering 160 million individuals and 26.3 per cent in 2047 covering 437 million people based on purchasing power.

“India’s health insurance market is expected to approach that of the US by 2031 and perhaps surpass it by 2047,” she said. 

Kirloskar added that India’s growth over the next three decades in a sustained pace will need manufacturing industry to grow 14-fold.

“It also calls for our industry to reinvent itself before big tech, armed with increasingly powerful artificial intelligence, disrupts the industry. With a commitment to governance and societal well-being, the Indian insurance sector has the potential to redefine its purpose, emerging as a vital catalyst for national progress. I believe the insurance industry could match the growth of the overall economy at the least,” she added.

Meanwhile, G Srinivasan, Ex CMD, New India Assurance said that general insurance sector in the country could grow at about 18 per cent to 20 per cent for the next two decades until India reached global levels of insurance penetration. 

“Currently the insurance penetration in India is among the lowest in the world. An average Indian spends hardly about Rs 900 on insurance, both life and nonlife put together and in general insurance probably only about Rs 200,” he said. 

Srinivasan noted that despite India's low insurance penetration, increasing disposable incomes and awareness could drive higher spending on insurance products in the coming years. Srinivasan stressed the importance of understanding insurance products and claims procedures, urging individuals to focus on value rather than solely on cost.

“It is important for individuals to make insurance work for them. For this they need to understand exclusions and obligations and must give maximum information to get risk better rated. Cost of insurance should not be the criteria for insurances but rather one should examine the product, the claim payment attitude and value adds in terms of risk management. It is also important to understand the claims procedure,” he added.