India Life Insurance Market, By Insurance Type (Individual, Group), By Distribution Channel (Direct, Agency, Banks, Others), By Region (North India, South India, East India, West India)Trend Analysis, Competitive Market Share & Forecast, 2018-2028

India Life Insurance Market, By Insurance Type (Individual, Group), By Distribution Channel (Direct, Agency, Banks, Others), By Region (North India, South India, East India, West India)Trend Analysis, Competitive Market Share & Forecast, 2018-2028

India Life Insurance Market Gaining Grounds: Forecast to Grow at a CAGR of 6.0% by 2028

India life insurance market is growing at a high CAGR because of the growing consumer awareness. Additionally, the increasing demand for term life insurance among the middle-class population and younger demographic, along with the increasing adoption of Insurtech in this sector is strengthening the market.

A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that India life insurance market is estimated to grow at a CAGR of 6.0% during the forecast period of 2022-2028. The Indian life insurance market is growing due to growing consumer awareness and increased demand for term life insurance among the middle-class population and younger demographics. Furthermore, a large proportion of the younger generation is focused on retirement planning, which is expected to drive demand for life insurance in the forecast period. In addition, the Government of India is taking various initiatives to boost the adoption of life insurance policies among citizens, including the Pradhan Mantri Jeevan Jyoti Bima Yojana. However, the high premium rates of policies may act as a major restraint on the growth of the India life insurance market.

Tax Benefits of Life Insurance is Propelling the Market Growth

The tax advantages associated with life insurance policies are a crucial factor in driving the adoption of coverage in the country, thereby strengthening the growth of the Indian life insurance market. Section 10(D) of the Income Tax Act, 196, for instance, allows the sum assured amount paid at maturity and upon the death of the insured to be absolutely tax-free for the beneficiary. Increasing awareness regarding such benefits of life insurance policies among citizens is anticipated to fuel the market growth during the forecast period.

Increasing Adoption of Insurtech by Life Insurance Companies is Powering the Market

The rising adoption of Insurtech in life insurance is providing a solid platform for increasing its accessibility among the general public and boosting its adoption. Therefore, numerous life insurance companies are deploying digital solutions to digitize their services. For instance, ICICI Prudential Life Insurance partnered with NPCI Bharat BillPay to offer ClickPay features to its customers in November 2021. Furthermore, PhonePe, India’s leading digital payment platform announced to have received preliminary approval from IRDAI to act as a broker for life and general insurance products. Such partnerships will allow both parties to enjoy financial and organizational synergies.

India Life Insurance Market - By Distribution Channel

Based on distribution channels, the India life insurance market is categorized into direct, agency, banks, and others. Among these, banks account for the largest market share. The consumer’s trust in the life insurance companies under the leading banks in India such as HSBC OBC Life Insurance, ICICI Prudential Life Insurance, SBI Life Insurance, and so on is higher than the other distribution channels. On the other hand, the agency segment also accounts for a large share of the market, as they assist potential customers in choosing the best policy from the various insurance companies.

India Life Insurance Market - Regional Insights

Geographically, the India life insurance market is segmented into North India, South India, East India, and West India. Western India dominates the India life insurance market, followed by South India. However, North India is also emerging with great potential with increasing demand for life insurance policies. Delhi and Uttar Pradesh rank relatively high in terms of life insurance policy demand. However, states like Bihar with relatively low life insurance coverage also hold great potential in the forecast period. The demand for life insurance is mainly being driven by the surge in COVID-19 deaths in the country.

Impact of COVID-19 on India Life Insurance Market

The COVID-19 pandemic tremendously boosted the growth of the India life insurance market. The market’s growth is attributed to the increased risk of death caused by COVID-19, especially among the younger demographics. Initially, the market halted due to the life insurance companies not offering new coverage to recovering COVID-19 patients after a cooling-off period. However, the growing awareness among policy seekers as well as insurers of the long-term effects of the Coronavirus is expected to propel the India life insurance market's growth.

India Life Insurance Market - Competitive Landscape

The leading players in the India life insurance market are Aditya Birla Sun Life Insurance Company, Bajaj Allianz Life Insurance Company, Bharti AXA Life Insurance Company, Canara HSBC OBC Life Insurance Company, HDFC Life Insurance Company, ICICI Prudential Life Insurance Company, Kotak Mahindra Life Insurance Company, Max Life Insurance Company, Reliance Nippon Life Insurance Company, SBI Life Insurance Company, Tata AIA Life Insurance Company, and other prominent players.

The India life Insurance market is highly fragmented due to the presence of several established players. The life insurance companies in India offer various deals and benefits to attract customers. They also offer and launch various types of policies that cater to their investment needs and objectives of different kinds. Moreover, the companies adopt various competitive strategies, such as partnerships, mergers, acquisitions, joint ventures, etc., to stay ahead in the competition. The implementation of inorganic strategies, such as advertising and marketing, are also prominent in this market.