Insurance Sector in India: Overview, IRDAI, Companies, Stats & Trends

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5 min read

Updated on Apr 14, 2023

A detailed insight into India’s insurance industry, the role of the IRDAI, insurance companies, and the sector’s present & future trends 

India’s insurance industry today proudly stands as the 5th most prominent life insurance market globally. This can be attributed to the steadily increasing salaries in Indian households and the growing awareness among Indians to save for future risks. Speaking of risks, the country’s threshold of risk-taking has also leaped with the emergence and growth of the insurance sector. People are now comfortable with the idea of taking risks because they can invest in a secure future for themselves and their loved ones with the help of insurance.

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Overview of the Indian Insurance Sector

The insurance industry in India is made up of 54 companies in total, of which 24 companies offer Life Insurance products and services, while the remaining 30 belong to General Insurance. The service of the Indian insurance sector to our country dates back as old as 200 years (approx).

The industry firms stands as the backbone of India’s risk management. Risks have always been known to be both inevitable and unpredictable. But with the advent of insurance, India learned that risks can be insured and confidently dealt with in the future. With more people investing in the industry, the Indian insurance business slowly started witnessing growth and evolution. The one prime benefit that it bestowed on Indians is that it inculcated in them the habit of saving and investing – the two pillars of the financial growth of any individual.

IRDAI: The Backbone of Indian Insurance

IRDAI is the popular acronym for the Insurance Regulatory and Development Authority of India. It is a statutory organisation that came into existence as a result of a Parliament Act to safeguard the interests of Indian insurance policyholders. In addition, the body works to regulate and monitor the orderly functioning of India’s insurance sector.

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Top Companies of the Indian Insurance Family

As stated earlier, the Indian insurance landscape is composed of two sets of companies – one that function in the Life Insurance business and the other which serves General Insurance products to Indian customers across the globe.

In addition to these two primary segments, the Indian insurance sector also encompasses health insurance and reinsurance companies. The health insurance sector in India revolves around providing products and services to Indians to insure their health risks. Reinsurance companies work on protecting their risks against an insurance policy that they provide to a customer by transferring the whole or part of that risk to another insurance provider.

Let us look at the names of some of the top players in each of these segments with a peek into their performance statistics in terms of the Claim Settlement Ratio (CSR). 

Top companies in the Life Insurance sector in India

Company CSR
Max Life Insurance 99.35%
Bharti Axa Life Insurance 99.05%
Exide Life Insurance 98.54%
Reliance Life Insurance 98.49%
PNB Metlife Insurance 98.17%

Popular Public Sector General Insurance Companies

Company CSR
National Insurance Company Limited 86.28%
Oriental Insurance Company Limited 90.18%
New India Assurance Company Limited 92.93%
United India Insurance Company Limited 97.25%

Best Public Sector Health Insurance Companies in India

Company CSR
National Health Insurance Company 86.28%
Oriental Health Insurance 89.00%
United India Assurance Company 97.25%

Top Reinsurance Companies in India

  • General Insurance Corporation of India (Public)
  • AXA France Vie – India Reinsurance Branch (Private)
  • Hannover Ruck SE – India Branch (Private)
  • Munich RE – India Branch (Private)
  • SCOR SE – India Branch (Private)

Key Trends in the Growth of the Indian Insurance Sector

Ever since it found its footing in the Indian landscape, the insurance industry in India has been growing at a steady pace. Let us look at some of the key trends that defined the growth and evolution of this sector in the country.

Role of FDI in the insurance sector: India witnessed a significant makeover in its economic set up in 1991 with the Economic Liberalisation breakthrough. One major advantage to the Indian economic growth as part of these reforms was the entry of Foreign Direct Investment or FDI in the Indian topography.

This allowed international reinsurance companies to form bases in India by opening up branches in the country. In addition, several leading players in the Indian insurance market, such as Birla, Reliance, Tata, and ICICI, entered into collaborations with global insurance companies worldwide, thereby boosting the growth of the Indian insurance business. 

Pay-as-you-drive scheme for car insurance: This reform introduced by the IRDAI allowed Indian drivers to pay lower insurance premiums, as per the actual kilometres they drove, which is recorded by a telematics device fitted into the car. This device also helps report the exact physical condition of the car, which enables timely intervention and repair, if required.  

Online renewal of policies: Yet another breakthrough for the Indian insurance industry, empowering the policyholder to renew his/her lapsed insurance policy online, thereby saving time and effort, and facilitating supreme convenience for the end user. 

Top General Insurance Companies

Summing it Up

The Indian insurance sector has been witnessing tremendous consistent growth over the past few decades and going by the numbers and trends moving in the upward direction, it is evident that the industry is only poised to grow shortly. Be a part of this evolutionary change and insure yourself and your family today by choosing the best insurance plan from PayBima, one of the leading players in the Indian insurance market. Get in touch with one of the representatives for complete guidance on the best and most affordable plan for your loved ones.

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FAQs on Insurance Sector in India

What type of sector is insurance?

Insurance comes under the tertiary industries, providing service to customers for risk management against unforeseeable circumstances like accidents, theft, injury, or diseases.

What are the 4 types of insurance?

The four main types of insurance sectors that exist in India are:
Motor Insurance
Health Insurance
General Insurance
Travel Insurance

What is the role of the insurance sector?

The insurance industry in India works around converting collected capital into investments that generate productive and positive results for the economy.

What are the 5 parts of insurance?

Insurance is composed of the following 5 components:
Deductible
Premium
Exclusions
Policy limits
Riders or add-ons

Which was the first insurance company in India?

The Indian Mercantile Insurance Ltd. was the first insurance company established in 1907 in the General Insurance category.  

What is risk in insurance?

Risk refers to the uncertainty of an event or incident that is liable to result in an economic loss.  

What is the premium in insurance?

Premium is defined as the sum that the policyholder pays to an insurance company in return for protecting his/her interests and safeguarding them against any future risks. 

Other Term Insurance Products

Apr 13, 2023
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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