Online Insurance Market in India 2022
Existing online insurance schemes can potentially cover 80% of the population – nearly 1.05 billion individuals. However, the actual coverage is considerably low. In FY 2021, the gross direct premium income of the online insurance market was valued at INR 9,719.65 Bn. It is expected to reach INR 21,582.01 Bn by FY 2027, expanding at a CAGR of ~14.45% during the FY 2021 ─ FY 2027 period. An increase in disposable income has resulted in substantially high savings by households, resulting in people opting for savings instruments such as insurance and pension policies.
Based on schemes, the online insurance market can be categorized into two segments: Life insurance and non-life insurance. In FY 2020, Life Insurance Corporation of India, the only public sector life insurer in the country, accounted for approximately 53% of market share. In FY 2020, HDFC Standard Life Insurance led the private sector in new business premiums with a market share of nearly 14 percent, followed by SBI Life Insurance (9%), and ICICI Prudential Life Insurance (6%). Non-life insurers comprise general insurers, standalone health insurers, and specialized insurers. In FY 2021, motor insurance accounted for the highest share of non-life insurance premiums at 36.6%, followed by health insurance at 27.3%.
Impact of COVID-19:
In the wake of the pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) issued several directions to ensure business continuity of insurance providers and intermediaries. It granted an extension of the payment of health and motor vehicle third-party insurance with due date between March 25, 2021, and May 3, 2021 to renew their policy by May 15, 2021. Furthermore, the grace period for insurance policy renewal, which was in March 2021, was extended to May 31, 2021.
The health insurance industry has witnessed the adoption of group insurance products because of the pandemic. Edelweiss-Gallagher, a composite online insurance firm, has launched a group insurance products for frontline workers and the informal sector. Regulators may recommend automatic renewal to keep policies from lapsing, allowing a grace period for premium payment. Also, to ensure a steady flow of cash, premium payment for government policies may be promoted. An increase in foreign investments can support the online insurance broking industry amid the pandemic.
With high demand, the public and private players aim to increase their offers and improve the quality of service, to leverage their market position. They are focused on scaling up their businesses and portfolios to address the high potential of the online insurance market.
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