The insurance industry will need a capital infusion of INR500bn ($6.2bn) per year to double its penetration in the next five years, the IRDAI chairman, Mr Debasish Panda, has said.
He said the number had been arrived at based on an analysis of current GDP growth, inflation and penetration. The overall penetration rate for insurance was 4.2% as of 31 March 2021.
Speaking at an annual insurance and pension summit organised by the Confederation of Indian Industry, he urged business conglomerates to channel funds into the insurance sector, saying the return on equity is a healthy 14% for life insurers and 16% for non-life, reported Press Trust of India. In the case of the top five insurance companies, the RoE is as high as 20%.
Mr Panda said that the IRDAI’s target is to double the insurance penetration rate over the next five years, adding that it would be possible to insure everyone by 2047, when the country will mark the 100th anniversary of independence.
India is at present the 10th biggest insurance market in the world and will be the sixth largest by 2032, he said. At present, almost two dozen life insurance companies and more than 30 non-life insurers operate in India.
