Insurance Sector in India

Introduction

The insurance industry of India has 57 insurance companies 24 are in the life insurance business, while 34 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. There are six public sector insurers in the non-life insurance segment. In addition to these, there is a sole national re-insurer, namely General Insurance Corporation of India (GIC Re). Other stakeholders in the Indian Insurance market include agents (individual and corporate), brokers, surveyors and third-party administrators servicing health insurance claims.

Market Size

In India, the overall market size of the insurance sector is expected to US$ 280 billion in 2020.

The life insurance industry is expected to increase at a CAGR of 5.3% between 2019 and 2023. India’s insurance penetration was pegged at 3.76% in FY20, with life insurance penetration at 2.82% and non-life insurance penetration at 0.94%. In terms of insurance density, India’s overall density stood at US$ 78 in FY20.

The market share of private sector companies in the general and health  insurance market increased from  47.97% in FY19 to 48.03% in FY20. In the life insurance segment, private players held a market share of 33.78% in premium underwritten services in FY20.

In FY21 (until February 2021), premium from new business of life insurance companies in India stood at US$ 31.9 billion.

Gross premiums written of non-life insurers in India reached US$ 24.41 billion in FY21 (between April 2020 and February 2021), from US$ 24.55 billion in FY20 (between April 2019 and February 2020), driven by strong growth from general insurance companies.

Investments and Recent Developments

The following are some of the major investments and developments in the Indian insurance sector.

  • Companies are trying to leverage strategic partnership to offer various services as follows:
  • In February 2021, Edelweiss General Insurance signed a partnership with Okinawa Autotech Pvt Ltd. to leverage the extensive dealer network of Okinawa (~350 dealerships as of Feb. 2021) across India to provide easy, end-to-end, digital-driven solutions to ensure superior customer experience.
  • In February 2021, Star Health Insurance partnered with PhonePe to offer digital health insurance on PhonePe, through its Arogya Sanjeevani policy.
  • In February 2021, Future Generali India Insurance launched ‘Health Super Saver’ insurance plan, with an 80% premium discount.
  • In February 2021, Bharti AXA General Insurance launched its ‘Health AdvantEDGE’ health insurance scheme to provide holistic cover against accelerating costs associated with medical requirements and other healthcare facilities.
  • In February 2021, ICICI Lombard General Insurance, a non-life insurance firm in the private sector, has been authorised by the International Financial Services Centre (IFSC) to establish an IFSC Insurance Office (IIO) in GIFT City in Gandhinagar, Gujarat.

Government Initiatives

The Government of India has taken number of initiatives to boost the insurance industry. Some of them are as follows:

  • Union Budget 2021 increased FDI limit in insurance from 49% to 74%. India's Insurance Regulatory and Development Authority (IRDAI) has announced the issuance, through Digilocker, of digital insurance policies by insurance firms.
  • Under the Union Budget 2021, Finance Minister Ms. Nirmala Sitharaman announced that the initial public offering (IPO) of LIC will be implemented in FY22, as part of the consolidation in the banking and insurance sector. Though no formal market valuation has been undertaken, LIC’s IPO has the potential to raise Rs. 1 lakh crore (US$ 13.62 billion).
  • In February 2021, the Finance Ministry announced to infuse Rs. 3,000 crore (US$ 413.13 million) into state-owned general insurance companies to improve the overall financial health of companies.
  • Under Union Budget 2021, fund of Rs. 16,000 crore (US$ 2.20 billion) has been allocated for crop insurance scheme.

Road Ahead

The future looks promising for the life insurance industry with several changes in regulatory framework which will lead to further change in the way the industry conducts its business and engages with its customers.

The overall insurance industry is expected to reach US$ 280 billion by the end of 2020. Life insurance industry in the country is expected to increase by 14-15% annually for the next three to five years.

The scope of IoT in Indian insurance market continues to go beyond telematics and customer risk assessment. Currently, there are 110+ InsurTech start-ups operating in India.

Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance.

Life Insurance Corporation of India (LIC)

  • Life Insurance Corporation of India (LIC) is one of the oldest state-owned insurance Companies in India.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of LIC was 98.04%.
  • During the year 2017-18, the total premium collected by LIC stood at Rs. 318223.21 crore.
  • During the year 2017-18, LIC a total linked premium of Rs. 889.75 crore.
  • During the year 2017-18, the total non-linked premium collected by LIC stood at Rs. 317333.46 crore.
  • For the year 2017-18, the total life insurance premium collected by Life Insurance Corporation of India stood at Rs. 318223.21 crore.
  • LIC offers 15% discount and various other benefits at leading restaurants all over India.
  • During the year 2017-18, LIC collected a total new business premium of Rs. 134671.70 crore.
 
  • In today’s date, ICICI Prudential Life Insurance is undoubtedly one of the most extensively recognized insurance companies in India.
  • During the year 2017-18, the total individual death claims or claim settlement ratio of ICICI Prudential Life Insurance Company was 97.88%.
  • During the year 2017-18, the total premium collected by ICICI Prudential Life Insurance Company stood at Rs. 27068.77 crore.
  • ICICI Prudential collected the total linked premium of Rs. 20387.49 crore during the year 2017-18.
  • During the year 2017-18, the total non-linked premium collected by ICICI Prudential stood at Rs. 6681.28 crore.
  • ICICI Prudential Life Insurance Company collected the total life insurance premium of Rs. 27068.77 crore during the year 2017-18.
  • The company offers 15% discount and other benefits at leading restaurants all over India.
  • ICICI Prudential collected a total new business premium of Rs.9211.75 crore during the year 2017-18.
SBI Life Insurance 
  • SBI Life Insurance Company is accountable for providing life insurance policies to over a million Indians in the present date.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of SBI Life Insurance Company was 96.76%.
  • SBI Life collected a total premium of Rs. 25354.19 crore during the year 2017-18.
  • SBI Life also collected a total linked premium of Rs. 14114.43 crore during the year 2017-18.
  • During the year 2017-18, the total non-linked premium collected by SBI Life stood at Rs. 11239.76 crore.
  • SBI Life Insurance Company collected a total new business premium of Rs. 10966.14 crore during the year 2017-18.
  • HDFC Standard Life Insurance is one of the highly reputed private sector insurance companies in India today.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of HDFC Standard Life Insurance Company was 97.80%.
  • For the year 2017-18, the total premium collected by HDFC Standard Life Insurance stood at Rs. 23564.41 crore.
  • HDFC Standard collected a total linked premium of Rs. 10267.91 crore during the year 2017-18.
  • During the year 2017-18, the total non-linked premium collected by HDFC Standard stood at Rs. 13296.50 crore.
  • HDFC Standard Life Insurance Company collected a total new business premium of Rs.11349.61 crore during the year 2017-18.
  • Max Life Insurance Company is one of the highly renowned insurance companies currently providing policies to millions of Indians.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of Max Life Insurance was 98.26%.
  • Max Life Insurance collected the total premium of Rs. 12500.89 crore during the year 2017-18.
  • For the year 2017-18, the total linked premium collected by Max Life stood at Rs. 3562.48 crore.
  • Max Life Insurance Company collected a total non-linked premium of Rs. 8938.42 crore during the year 2017-18.
  • Max Life Insurance collected a total new business premium of Rs. 4348.59 crore during the year 2017-18.
  • Bajaj Allianz is one of the highly reputed and renowned insurance companies that provides with the best deals on policies.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of Bajaj Allianz Life Insurance was 92.04%.
  • Bajaj Allianz Life Insurance Company collected a total premium of Rs. 7,578.37 crore during the year 2017-18.
  • During the year 2017-18, the total linked premium collected by Bajaj Allianz Life Insurance Company stood at Rs. 2,950.88 crore.
  • Bajaj Allianz Life Insurance collected a total non-linked premium of Rs. 4,627.49 crore during the year 2017-18.
  • During the year 2017-18, the total new business premium collected by the Company stood at Rs. 4,291.14 crore.
Kotak Mahindra Life Insurance 
 
  • Kotak Mahindra is one of the highly sought after insurance companies presently in India operating with millions of customers.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of Kotak Mahindra Life Insurance was 93.72%.
  • During the year 2017-18, the total premium collected by Kotak Mahindra stood at Rs. 6,598.67 crore.
  • Kotak Mahindra Life Insurance Company collected the total linked premium of Rs. 2,309.27 crore during the year 2017-18.
  • During the year 2017-18, the total non-linked premium collected by Kotak Mahindra stood at Rs. 4,289.41 crore.
  • During the year 2017-18, the Kotak Mahindra Life Insurance Company collected the total new business premium of Rs. 3,404.21 crore.
 
  • Tata AIA Life Insurance Company is accountable for providing all-inclusive life insurance covers to more than a million people living in India.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of Tata AIA Life Insurance was 98.00%.
  • Tata AIA Life Insurance Company  collected a total premium of Rs. 4,162.95 crore during the year 2017-18.
  • The total linked premium collected by Tata AIA Life Insurance during the year 2017-18 stands at Rs.1,313.55 crore.
  • Tata AIA Life Insurance Company collected a total non-linked premium of Rs. 2,849.40 crore during the year 2017-18.
  • During the year 2017-18, the total business premium collected by the Company stood at Rs. 1,488.42 crore.
Reliance Nippon Life Insurance
  • Reliance Nippon Life Insurance is one of the most renowned life insurance companies presently operating in India.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of Reliance Nippon Life Insurance was 95.17%.
  • Reliance Nippon Life Insurance collected a total premium of Rs. 4,069.37 crore during the year 2017-18.
  • During the year 2017-18, the total linked premium collected by Reliance Nippon stood at Rs. 846.26 crore.
  • Reliance Nippon collected a total non-linked premium of Rs. 3,223.11 crore during the year 2017-18.
  • During the year 2017-18, the company collected a total business premium of Rs. 915.62 crore.
PNB MetLife Insurance
 
  • PNB MetLife is one of the most preferred insurance companies in India. The company is presently providing with life insurance policies to more than a million Indians.
  • For the year 2017-18, the total individual death claims or claim settlement ratio of PNB MetLife Insurance was 91.12%.
  • During the year 2017-18, the total premium collected by PNB MetLife Insurance stood at Rs. 3,953.51 crore.
  • PNB MetLife collected a total linked premium of Rs. 820.95 crore during the year 2017-18.
  • PNB MetLife collected a total non-linked premium of Rs. 3,132.67 crore during the year 2017-18.
  • During the year 2017-18, the total business premium collected by PNB MetLife stood at Rs. 1,427.08 crore.

Among the listed companies HDFC Life , SBI Life Insurance and ICICI Prudential look best for investment in stocks 

HDFC Life ...touches lows and scales new highs 350 to 684 in 3 years . Has a sine wave , so should come down 

SBI Life Insurance 700 to 990 on a high now 

ICICI Prudential Life Insurance 300 to 580 nice sine wave 

I would prefer HDFC Life and ICICI Prudential 

Insurance Sector in India: Industry Overview, Market Size & Trends | IBEF

Top 10 Life Insurance Companies in India in 2020 (gibl.in)


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