The insurance market in India is most likely to grow significantly to reach a valuation close to $222 billion by the financial year 2026. This information is obtained from the recent report by Redseer, a leading homegrown consultancy firm. As per the report, the growth in market is driven by the widened middle class base and higher Internet penetration in the country.
Total Addressable Market (TAM) of Different Insurance Category
Within the insurance market in India, the life insurance segment covers close to three-fourth of the total market share and has a TAM of $66.5 billion as of FY2022. This insurance category is followed by motor insurance that has a TAM of $10 billion in the same financial year. At the end lies the retail health insurance category with a TAM of $4.7 billion, as per the report.
Drivers Behind the Growth of Indian Insurance Market
- Stringent shift towards making India a digital economy
- Rising cost of healthcare in India
- The Covid-19 pandemic
- National-level awareness campaigns about insurance policies
- New online distribution models such as B2C, B2B, and B2B2C
Insurance Market in India as Compared to Other Countries
The digital penetration in the insurance sector in India stands at 2% – a comparatively lower mark in relation to the U.S. and China where it is 14% and 6% respectively. The lower penetration also denotes headroom for growth in the insurance market in India in the time ahead.
