Page 44 - The Insurance Times February 2026

Y Compulsory (motor), or Life density: up; non-life density: flat
Y Employer-driven (group health), or Life density moved from USD 70 to USD 72, while non-life
density stayed around USD 25.
Y Claim-difficult (a perception problem), rather than

Y A routine protection purchase. What this implies:
India is spending slightly more per person on insurance, but
Chart 1 - India penetration trend (FY2014-15 the increase is modest and appears concentrated. When
to FY2024-25) density rises but penetration stays flat, it often suggests
that:
Y Higher-ticket urban segments are paying more, while
Y Mass-market participation is not expanding proportion-
ately.

Chart 2 - India density trend

2) The longer trend: India peaked and then fell
back
The report's historical series (FY2014-15 to FY2024-25)
shows that India's total penetration climbed up to around
4.2% (FY2020-21 and FY2021-22) and then slipped back to
3.7% by FY2023-24, where it remains in FY2024-25.

This raises a key question: why did penetration not hold 4) India vs world: The gap is not narrowing
when the economy reopened and digitisation accelerated? The IRDAI report provides direct comparison with global
averages.
A critical explanation is that the pandemic years created a Penetration comparison
temporary spike in risk awareness and protection buying,
Y World total penetration: 7.3% (2024)
but the system failed to convert that spike into a perma-
nent behavioural shift. In practical terms, we may have: Y India total penetration: 3.7% (2024-25)
Y Acquired customers without retaining them,
India is roughly about half of the global level. The more
Y Sold policies without building deep trust in claims, serious story is within segments:
Y Improved access without improving understanding, and Y World non-life penetration: 4.3% vs India 1.0%
Y Expanded product menus without making products sim- This indicates India's protection gap is not mainly a life in-
pler. surance gap-it is a general insurance depth gap.

3) Density: improving slowly, but still far from Density comparison
where India should be Y World total density: USD 943 (2024)
Y India total density: USD 97 (2024-25)
Total density: from USD 95 to USD 97
The report shows India's total insurance density improved This means India is at roughly one-tenth of global per-capita
from USD 95 (2023-24) to USD 97 (2024-25). insurance spending.

The Insurance Times February 2026 39