Topic 7: INSURANCE: EXPRESSWAY

As of January 2025, the Indian insurance sector demonstrated strong growth, with total gross direct premiums for FY 2023-24 reaching approximately ₹11.23 lakh crore, marking a 10% compound annual growth rate (CAGR) over the past five years. The life insurance sector maintained a key role in driving growth, although specific premium figures for FY 2023-24 were not disclosed. Historically, life insurance premiums have been significant contributors to overall market expansion. The non-life insurance segment also grew, reporting a 7.7% premium increase, driven by heightened awareness and regulatory changes. Starting January 2025, commercial property insurance premiums surged by up to 80% due to increased reinsurance costs and regulatory adjustments, signalling a shift toward sustainable pricing models. The Economic Survey 2025 projected that India's insurance market would become the fastest-growing among G20 nations over the next five years. The Union Budget 2025 announced raising the Foreign Direct Investment (FDI) limit for insurance from 74% to 100%, provided premiums are fully invested in India. This is expected to attract substantial foreign investments and support double-digit growth in the non-life insurance sector, with health insurance leading the way alongside emerging segments such as pet and liability insurance. Participation in the Pradhan Mantri Fasal Bima Yojana (PMFBY) rose, with 24 states and 15 insurers involved. Enrolment grew by 26%, reaching 4 crore farmers, enhancing agricultural risk coverage. Despite insurance penetration declining from 4% to 3.7%, insurance density rose from $92 to $95 per capita, indicating greater public awareness of insurance products. Innovations in product development and increased digitalization are expected to make insurance more accessible, particularly in tier 2 and tier 3 cities, fostering further growth and evolution in the sector.



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