Rapidly growing insurance segments

The domestic life insurance industry registered 19.2 per cent y-o-y growth for new business premium in 2017, generating a revenue of Rs 1.23 trillion (US$ 20.34 billion) largely due to the high growth in the individual non single premiums policies. Individual single premiums received increased from US$ 0.16 billion in 2015 to around US$ 1.02 billion in 2016.

Insurance penetration reached 3.4 per cent in FY16 and is expected to cross 4 per cent in FY17.


Source: Insurance Regulatory and Development Authority (IRDA)


Strong Demand

§ Growing interest in insurance among people; innovative products and distribution channels aiding growth

§ Increasing demand for insurance offshoring

§ Growing use of internet has started increasing demand


Attarctive opportunities

§ Life insurance in low-income urban areas

 § Health insurance, pension segment

§ Strong growth potential for micro insurance, especially from rural areas


Policy support

§ Tax incentives on insurance products

§ Passing of Insurance Bill gives IRDA flexibility to frame regulations

§ Clarity on rules for insurance IPOs would infuse liquidity in the industry

§ Repeated attempts to make the sector more lucrative


Launch of innovative products

§ The life insurance sector has witnessed the launch of innovative products such as Unit Linked Insurance Plans (ULIPs)

 § Other traditional products have also been customized to meet specific needs of Indian consumers

Tax incentive

§ Insurance products are covered under the exempt, exempt, exempt (EEE) method of taxation. This translates to an effective tax benefit of approximately 30 per cent on select investments (including life insurance premiums) every financial year