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During 2020-21, Life insurance industry recorded a premium income of ₹6.29 lakh crore , as against ₹5.72 lakh crore in the previous financial year, registering a growth of 9.74%. While renewal premium accounted for 55.7% of the total premium received by the life insurers, new business contributed the remaining 44.3%, according to the Economic Survey 2021-2022.
While the gross direct premium (within and outside India) of Non-Life insurers was ₹2.02 lakh crore, as against ₹1.9 lakh crore in 2019-20 during 2020-21, registering a growth of 5.2%. Motor and health segments contributed a significant portion of the growth.
Internationally, the potential and performance of the insurance sector are generally assessed on the basis of two parameters, viz., insurance penetration and insurance density. Insurance penetration is measured as the percentage of insurance premium to GDP and insurance density is calculated as the ratio of premium to population (measured in US$ for convenience of international comparison).
In India, insurance penetration was 2.71% in 2001 and has steadily increased to 4.2% in 2020. As of 2020, the penetration for life insurance in India is 3.2% and non-life insurance penetration is 1%. While India is at par with international average in terms of insurance penetration for life insurance, we lag behind in terms of non-life insurance. Globally, insurance penetration was 3.3% for the life segment and 4.1% for the non-life segment in 2020.
The insurance density in India increased from $11.5 in 2001 to $78 in 2020. In 2020, density for Life insurance in India is $59 and Non-Life insurance is $19, much lower than global standards. Globally, insurance density was $360 for the life segment and $449 for the non-life segment respectively in 2020, as per the Economic Survey.
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