Indian Insurance Sector At Crossroads And Its Implication For The Actuarial Professionals

By Arindam Mookherjee (Contractor), India Lead, Society of Actuaries

June 2025

India is one of the fastest growing insurance markets in the world, and Swiss Re forecasts that it will be the sixth largest by 2032, up from 10th largest in 2021. These estimates suggest that total insurance premiums will grow on average by 14% annually in nominal local currency terms (9% per annum in real terms) over the next decade. The forecast indicates life insurance premiums will grow by 9% annually (in real terms) by 2032, making India the fifth largest life market globally. COVID-19 has generated increased risk awareness and demand for life insurance. Regulatory developments and digitalisation should also support sector growth. The sector is expected to grow and fulfil the Government’s vision of ‘Insurance for All’ in India by 2047.

Is such a vision just a dream or can it really be achieved? This target for universal insurance coverage holds immense promise but is fraught with significant challenges. Let us acknowledge some facts. While the sector has grown, significant lacuna exists across the industrial landscape – over 40 crore individuals, which is around 31% of India’s population do not have health insurance. There is still an approximate 87% gap in life insurance coverage. Importantly, for the primary young working population aged 26-35 years, the mortality protection gap exceeds 90%. As the domestic economic condition and health care ecosystem improves, India is increasingly witnessing lower mortality rates and increased longevity. This is translating into a significant pension gap for country.

For physical assets too, the situation is equally dire with more than 50% of vehicles operating without mandatory third-party insurance, homes remain unprotected, and assets are seldom insured. This lack of insurance poses a substantial risk to the financial stability of families, leaving them vulnerable to unforeseen events. This gap has been created by a lack of awareness, affordability and trust in insurance products, coupled with the perception that available products are too technical or cumbersome to acquire, inhibits many from seeking coverage. Finally, and most importantly, financial constraints play a critical role in under insurance across India, where people are willing to take on significant risks, instead of paying for their protection. Data-related issues with contractual regulatory overburden also make some domains of insurance especially difficult to develop localised products for. An example of this is agriculture insurance.

Technological advancements and policy changes are paving the way for a more inclusive insurance landscape. Initiatives like the National Health Claims Exchange, which streamlines the insurance claims process, and digitisation efforts such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme demonstrate how technology can reach the country’s remotest corners. The ease of doing business has significantly improved with the advent of the Unified Payments Interface (UPI), making transactions seamless and efficient.

A skilled talent pool needs to be built while fostering a positive image for the insurance industry to ultimately enhance insurance penetration. The disruptions in the insurance sector cannot happen without the support of actuaries, according to the Chairman, IRDAI, Mr. Debasish Panda. He has emphasised that due to the radical technology-driven changes happening across the insurance sector, the approach of “one-size-fits-all” has become a thing of the past. Moreover, the vision of “insurance for all” can become a reality by 2047 only if the industry starts underwriting disruptions.

Acknowledging the role of these experts of mathematics and statistics, Mr. Panda asserted that there is a need to come out of the traditional and conventional roles and embrace dynamism and agility. There is a need to see the sector from a different lens. He emphasised the need to quickly expand the supply of professionally trained and certified actuaries and said that the industry should aim to increase the number of Fellow actuaries to 4,500 by 2025 and 25,000 by 2030, from the present levels of around 700.

Addressing insurance penetration challenges in India requires a multi-pronged approach that combines financial education, technology, regulatory support and community engagement. By tailoring products and services to the specific needs of different demographic and economic segments, and building trust and awareness, the Indian insurance industry can achieve deeper and more meaningful penetration. This warrants significant inputs from trained actuaries who can play a major role in customised product development, which is at the core of the next generation of insurance industry growth in India.

This article is also available on an SOA blog hosted by CIM GLOBAL INDIA