India’s Insurance Sector to Skyrocket: USD 11 Trillion AUM by 2047

India's insurance industry is poised for prolific growth, reaching USD 11 trillion AUM by 2047. Although economic goals align with a USD 30 trillion GDP, insurance penetration lags, particularly in health and non-life sectors. InsurTech advancements will be pivotal in boosting coverage for financial stability.

The insurance sector in India is poised for exceptional growth, with projections suggesting that Assets Under Management (AUM) will soar to USD 11 trillion by 2047, marking a substantial increase from the current USD 0.7 trillion, according to an influential report by the Boston Consulting Group and the India InsurTech Association. This anticipated expansion is in line with India's broader economic aspirations, particularly the goal of achieving 'Health for All' by 2047, as the nation's GDP is expected to reach USD 30 trillion.

Despite these optimistic forecasts, the report indicates that insurance penetration in the country is still markedly low, especially in the health and non-life insurance sectors. The data reveals that India's health insurance penetration is a meager 0.31 percent, significantly trailing behind the United States' 5.26 percent and China's 0.77 percent. Likewise, the penetration rate for non-life insurance stands at 1 percent in India, whereas it is 1.8 percent in China and 9.3 percent in the United States. Meanwhile, life insurance penetration is relatively robust at 2.8 percent but still under the global average of 2.9 percent.

The report emphasizes the urgent need to broaden insurance coverage, predominantly in health insurance, where 45 percent of medical expenditures are presently paid out-of-pocket. Economic policy winds are already propelling growth in the sector. India aims to ensure complete coverage for its citizens by reducing out-of-pocket healthcare costs to below 10 percent. The country envisions itself as the world's third-largest insurance market, boasting over 10 companies in the global top 50, supported by an ecosystem of over 100 scalable InsurTech ventures. InsurTech companies are crucial growth drivers, with over 75 percent concentrating on building sustainable business models and more than two-thirds seeking strategic partnerships and market expansion. While substantial progress has been made in increasing insurance penetration, ample room for growth remains.

(With inputs from agencies.)