It has been nearly a quarter of a century since the Indian insurance sector was liberalised. Despite the presence of 27 life insurers, 34 nonlife insurers, one domestic reinsurer, and ten foreign reinsurance branches, the need for a greater number of players particularly specialised ones-has never been more pressing, given the significant coverage gaps that continue to challenge the country.
In the last few years, six new players have entered the insurance industry, marking the first additions in the life segment in over a decade and the first in the general and health insurance segments in nearly five years.
Debasish Panda, chairperson, Insurance Regulatory and Development Authority of India (Irdai), has more than once highlighted that the number of insurance companies in the country is not enough to cater to the evolving needs of 1.4 billion people.
Speaking at a CII insurance event in October, Panda outlined the need to bring more and more capital into the sector from domestic and foreign sources.
"We have removed all the entry barriers for floating an insurance company.
Today, every class of investor or funds private equity, venture capitalists, institutional investors, family offices can invest in the insurance sector and become an investor or promoter," Panda said at the event, adding that large conglomerates and business groups in India should enter the insurance sector.
According to Irdai's annual report for 2022-23, the penetration of the life insurance sector in India reduced from 3.2 per cent in 2021-22 to 3 per cent in 2022-23, while that of non-life insurance sector remained at 1 per cent in both these years. India's overall insurance penetration reduced to 4 per cent in 2022-23, from 4.2 per cent in 2021-22.
While penetration has gone down in 2022-23, the life insurance density increased to $70 from $69 in 2021-22.
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