Intense competition is reshaping the insurance landscape in India, with the IRDAI's plan to issue more than 20 new licences expected to further disrupt the market, says global consulting firm McKinsey & Company.
In its report titled “Steering Indian insurance from growth to value in the upcoming ‘techade’”, McKinsey says that private players challenging public-sector incumbents to rethink strategies and embrace digital transformations.
Over the past six to seven years, private life insurers have captured an additional nine percentage points of market share, while private general and health insurers have gained about 17 percentage points.
Private general insurers and stand-alone health insurance (SAHI) players collectively held a share of more than 60% in the fiscal year ended 31 March 2023 (FY2023), driving growth for the overall industry.
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General Insurance: Market share (%) by type of insurer by GWP
Key
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Specialised
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Standalone health
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Private non-life
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Public non-life
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Life insurance: Market share (%) by type of insurer by GWP
Source: McKinsey & Co
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In the life insurance sector, private players’ new business is growing at twice the rate of the Life Insurance Corporation of India.
Insurers are digitising rapidly and improving employee productivity to create a more dynamic, competitive market. Digital disruptors such as Go Digit and Acko have grown their GWP by more than 6% CAGR in the past four years, edging past established competitors through technology-driven customer-centric approaches such as smartphone-enabled inspections, AI- and machine-learning-based fraud detections, instant approvals and easy digital claims, and ecosystem partnerships for strengthened service.
In April 2023, IRDAI chairman Debasish Panda said that the regulator was looking at around 20 more applications for insurance licences after it granted a licence to a general insurer, Kshema General Insurance, for the first time since 2017. In October 2024, Mr Panda said, "There is scope for more than 70 insurance companies to cater to 1.4bn people.”
Currently, there are around 60 life, non-life and standalone insurers in India, including specialised insurers but excluding reinsurers.