Despite government efforts to insure the entire population by 2047, India’s insurance penetration dipped to 3.7% in 2023-24 from 4% in 2022-23, primarily due to a decline in life insurance penetration from 3% to 2.8%. This follows a drop from 4.2% in 2021-22 to 4% in 2022-23.

The penetration with respect to the non-life insurance industry remained the same at 1% during the said period, according to the latest annual 2023-24 report by insurance regulator IRDAI. India's insurance penetration was higher than the global insurance penetration of 2.9% for the life segment and 4.2% for the non-life segment. Overall, insurance penetration and density were 7% and $889, respectively, in 2023.

During 2023-24, insurers settled about 83% of the total number of claims registered in their books and repudiated about 11% of them.

The life insurance market in India recorded a premium growth of 6.06% at ₹8.30 lakh crore in 2023-24. The private sector life insurers led with a 15.05% growth in premiums, while the PSU insurers lagged and recorded just a 0.23% growth in premiums.

Renewal premiums contributed to 54.41% in total premiums underwritten by life insurers in 2023-24. The balance of 45.59% was contributed by the new business premium. The growth in new business premium was 1.93% compared to renewal business at 9.79%. Single premium products continue to contribute a major share for public sector life insurers, with a contribution of 38.60% of its total premium while it was 22.38% for private sector life insurers.

Non-linked products contributed ₹7.08 lakh crore, contributing 85.36% of the total premium and the share of linked stood at 14.64%. The life insurance segment constituted 79.88% of total life insurance premiums, followed by pension and annuity segments together about 19.74%.

The public sector led in terms of new policy issuance. During 2023-24, life insurers issued 291.77 lakh new policies under individual business, out of which the public sector insurer issued 203.93 lakh policies (69.89%) and the private life insurers issued 87.84 lakh policies (30.11%). In terms of growth in the number of new policies issued against the previous year, the private sector insurers grew 9.23%, PSUs at just 0.18% and the industry at 2.48%.

As of 31st March 2024, the total paid-up capital of the life insurance sector stood at ₹37,073 crore, reflecting a 6.05% increase compared to the previous year. This increase was primarily attributed to ₹980 crore infusion of additional capital in Tata AIA Life Insurance Company Limited and ₹429 crore capital invested by the three new life insurers, Acko Life Insurance Limited, Credit Access Life Insurance Limited and Go Digit Life Insurance Limited. Further, eight other life insurers injected an additional ₹707 crore into the life insurance industry. Consequently, the net impact on the total paid-up capital for the fiscal year 2023-24 was an increase of ₹2,116 crore.

The life insurance industry paid total benefits of ₹5.77 lakh crore in 2023-24, which constitutes 70.22% of the net premium. The benefits paid on account of surrenders or withdrawals increased 15.29% to ₹2.29 lakh crore in 2023-24, of which public sector life insurers accounted for 58.36%.

During 2023-24, the non-life insurance industry underwrote a total direct premium of ₹2.90 lakh crore in India, up 12.76% from the previous year. The contribution of public sector general insurers increased 8.88% from ₹82,891 crore in 2022-23 to ₹90,252 crore in 2023-24.

Private sector insurers, including standalone health insurers, underwrote ₹1.88 lakh crore against ₹1.58 lakh crore in 2022-23. Out of all non-life insurers, 24 private insurers (including standalone health insurers) operating in the year 2023-24, reported an increase in premium underwritten as compared to the previous year.