Due to the introduction of innovative products covering miscellaneous risks associated with the current market scenario, the non-insurance market in India has been witnessing growth. The non-life insurance industry in India accounts for approximately 30% of the total insurance industry premium which is much less than the global share.
There has been a rapid growth in the non-life insurance market in India within a few years. The exponential growth has been a consequence of the entry of private players, bundling of offerings, adoption of technology and alliances, competitive pricing and ramping up of the distribution force. The insurance and re-insurance industries of India are regulated and promoted autonomously by the Insurance Regulatory and Development Authority (IRDA)
Despite the rapid growth demonstrated by the growth in total non-life premium, domestic non-life insurance penetration and density have remained low as compared to both the developed as well as other emerging nations. This has been mainly on account of lack of financial awareness, lower inclination to buying insurance coverage, coupled with a minimal understanding of general insurance products. This indicates the sizable potential market in India with respect to all segments of non-life insurance.
The main non-life insurance products offered by the companies in India include health insurance, fire insurance, motor insurance, and marine insurance, among others. The motor insurance segment have been dominating the market, contributing the largest share of the total general insurance gross direct premium collected in the forecasted year. This has been mainly due to the rise in the demand of automobiles and compulsion of motor insurance across the company.
Non-life insurance policies are sold through corporate agents, individual agents, brokers and direct business, in India. Direct business transactions contributed to the largest part of the non-life insurance policies sold in India. Due to the fast and easy process of direct business distribution, people generally prefer buying insurance policies through them.
The growing demand for a number of associated sectors such as the healthcare industry and the automobile industry, the non-life insurance market is experiencing a steady growth rate.
Due to the growing young working population coupled with the increased purchasing power of the middle class population, the automobile production market in India is reaching new highs. Since automobile insurance is compulsory in India, the motor insurance segment of the non-life insurance market in India is expected to grow with the growth of the automobile sector.
Apart from the automobile industry, rising inclination towards preventative healthcare and the growing health awareness among people are encouraging the demand for the health insurance segment of the non-life insurance segment.
The non-life insurance market in India is anticipated to expand in the coming years. Policy decisions in key emerging markets are expected to emerge as a key growth driver for non-life insurance. The demand for non-life insurance will rise due to the improved economic activity, which in turn will improve income and spending, which will ultimately increase investment appetite and create greater demand for protection and saving needs, which will also boost the sale of life insurance.