Page 57 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 45

Business Trends and Key Factors

Shaping the General Insurance Business

in India in 2030

- Dr. Steward Doss
6 Professor, National Insurance Academy, Pune
- Dr. Abhijit K. Chattoraj
Chartered Insurer, Dean and Professor, Birla Institute of Management Technology

Recent General Insurance (GI) Industry Backdrop

The General Insurance Industry in India has been growing at a CAGR of 14% during the last five
years (2017 to 2022), with the industry mobilizing a total premium of 2,40,000 Crores during the Financial
Year 2021-22, and the same is projected to reach a premium volume of more than 3,91,000 Crores in 2030.
Though the current financial performance of the industry is positive, with an operating profit of Rs.6616
Crore as of the year, overall, the general insurance market is confronted with multiple challenges: Growing
1
underwriting losses (the total amount of underwriting losses during 2021-22 is around 28500 Crore with
massive rate cutting of premium and heavy discounting; The increasing cost of operation (% of Management
Exp. to Net Premium is over 30% per the IRDAI Annual Report of 2021-22); Increasing Incurred Claim
ratios of the key portfolios; the Combined Ratio of the industry is above 100%; Rising investment market
volatility; Lower insurance penetration (1%) and density (US$60) as compared to the world averages.

1. Potential and Possibilities

However, our country’s future economic growth is very positive, with a projected growth rate of
over 7%, which would help India achieve over $5 trillion by 2027, making India the 3 Largest economy,
rd
next to the USA and China. Secondly, increasing growth of the IT sector and Data Analytics industry
would quickly help India become the third largest in a short time. More importantly, India’s young
population is the largest and most dominant segment. OECD study reports suggest that 68% of India’s
population is young and 55% of its population is in the age group of 20-59 (working population) in the
year 2020 and is estimated to reach 56% of the total population by 2025 (OECD Report, 2022). These
point towards a strongly young and insurable population in India.

1 Indian Express dated 22 November 2022, Rs.28500 crore underwriting loss leads to premium hikes by
general insurers.