India insurance report projects 5 trillion premium by 2030

Mumbai: In a first, the Birla Institute of Management Technology (BIMTECH), one of India's leading B-schools, unveiled the India Insurance Report - Transforming Indian Insurance - Series II. One of the report's significant findings was that the general insurance premium is expected to surpass Rs 3,91,216 crores by 2030 based on historical data of 20 years. However, the industry's premium volume may exceed Rs 5,00,000 crore by 2030 as the ideal premium level, considering regulatory reforms intended to achieve full insurance coverage for every household by 2047 and an anticipated rise in market participants and intermediaries. This study, conducted by Prof Steward Doss at NIA Pune and Prof Abhijit Chattoraj, Dean (SW & SS); Professor & Chairperson of PGDM - (Insurance Business Management) at BIMTECH, is based on historical premium data of all important lines of GI business between 2001-2022.

GN Bajpai, Former Chairman SEBI & LIC said, “Customers are gaining power in the insurance business. They are advocating for better value and more tailored services. New technologies, such as tiny systems for risk analysis and wearables for real-time data tracking, are being employed to do this. Wearables, for example, can be used to monitor health, house, and auto insurance risks. This is known as InsurTech, and it is transforming the way insurance firms do business and generate money. Some of the major advantages of InsurTech are improved customer interaction, creating personalized insurance products, more effective corporate management, more effective risk management, increasing the size of the audience, and increasing earnings.”

This report focuses on Demographic Changes, Understanding Customer Behavior, Financial Literacy and Mindset Change, Leveraging AI and ML, Wellness Insurance and Insurtech Integration, Digital Transformation, Growth Projections, VR, AR, and Blockchain Adoption, IoT and Parametric Insurance.

According to Dr Abhijit K Chattoraj, a BIMTECH India Insurance report editor, "India's ageing population is expected to increase, with over 20% of the population aged 60 and above by 2040. The growth of middle-income and high-income households in 2030 will drive insurance demand. Increased use of AI and ML can help insurers understand changing risk dynamics and customer needs. Risk-Based Capital (RBC) implementation by 2024-25 can enable risk-based premium rates and product innovation. Increasing digital usage among customers will drive end-to-end digital experiences and technological applications. New online distribution models like B2C, B2B, and B2B2C will be key growth drivers."

BIMTECH India Insurance report suggests achieving the goal of "Insurance for All by 2047." The establishment of robust self-regulatory organisations for insurers, brokers, surveyors, and InsurTech is essential. These organisations can provide impetus to newer business lines such as Aviation, Oil and Energy, Liability, Trade Credit, and political risks, ensuring separate monitoring instead of grouping them as a generic "miscellaneous" category. Additionally, several key factors are influencing the industry and have significant potential to shape its future trajectory, such as changing profiles of insurance buyers driven by sustained awareness campaigns, especially due to the COVID-19 pandemic. The evolving profile necessitates more customised insurance products to meet individualised needs. Capital infusion is crucial to expanding the insurance business and increasing insurance penetration. The industry requires a greater number of intermediaries and insurance players to sustain anticipated growth. Technology is becoming a critical enabler, enhancing underwriting and claims management coordination. Regulatory and governmental support has streamlined business processes, reducing regulatory compliance burdens and facilitating innovative product launches.