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 4.2% in FY21, with life insurance penetration at 3.2%. In terms of insurance density, India’s overall density stood at US$ 78 in FY21. Premiums from India’s life insurance industry is expected to reach Rs. 24 lakh crore (US$ 317.98 billion) by FY31. In FY23 (Until October 2022), premiums from new businesses of life insurance companies in India stood at US$ 25.3 billion. In October 2022, life insurers’ new business premiums grew to Rs. 15,920.13 crores (US$ 1.94 billion), according to Life Insurance Council data. Although the growth was promising, India needs to understand the power of an efficient distribution model for life insurance that is easier for consumers to access and purchase policy without the need of any intermediaries. Consumer awareness is still in its infancy.
Points of discussion:
1. Customers in India typically have their reservations and a natural mistrust towards life insurance due to the complexity and experiences having a misunderstood policy. How do you think, this can be changed through the integration of a complete digital distribution model?
2. Do you see a premium advantage for life insurance buyers, if the current distribution gets transformed to a digital experience?
3. Recently, the IRDAI has introduced something called the "Bima Sugam" scheduled to launch in January 2023, which is the online distribution portal for insurance in India that aims to transform how insurance is bought. What's your view on this? Do you think it can change the way people buys insurance in India? Any benefits and challenges you see here?
Speaker Bio: Vikas Rohtagi, is the Assistant Vice President at SBI Life Insurance. Prior to SBI Life Insurance, Vikas was associated with PNB MetLife India Insurance and Aviva India.