Insurance In India Vs The World: How Far Behind Are We?

The latest numbers from the Insurance Regulatory and Development Authority of India (IRDAI) Annual Report 2024-25 show that while India has made steady progress over the years, the gap with the global insurance market remains wide. Two simple metrics are used to judge insurance development. First is insurance penetration, which measures premiums as a percentage of the GDP of a country. Second, insurance density measures the ratio of premium to population (per capita premium). Together, they reveal not just scale, but also reach.

According to the IRDAI Annual Report, India’s insurance penetration stood at 3.7 per cent in 2024-25, the same as the previous year. At first glance, it may look like a stable number, but a closer look shows a mixed picture. Life insurance penetration slipped from 2.8 per cent in 2023-24 to 2.7 per cent in 2024-25. Non-life insurance penetration remained flat at 1 per cent. Fundamentally, insurance has not expanded its footprint in the economy over the past year. The charts below show the long-term trend of Insurance penetration and Insurance Density in India.

Insurance density offers a slightly more encouraging signal, though. India’s per capita insurance premium rose from USD 95 in 2023-24 to USD 97 in 2024-25, as per the IRDAI Annual Report 2024-25. Life insurance density has increased from USD 70 to USD 72, while non-life insurance density stayed unchanged at USD 25. This gradual rise in density has been consistent since 2016-17, indicating slow but steady growth in individual participation.

Yet, when placed against global benchmarks, India’s position looks modest.

“As per the Swiss Re Sigma World Insurance Report, globally insurance penetration and density were 3 per cent and USD 388 for the life segment and 4.3 per cent and USD 555 for the Non-life segment. Overall, insurance penetration and density were 7.3 per cent and USD 943, respectively, in 2024,” says the Annual Report.

The contrast is stark. India’s overall penetration of 3.7 per cent is roughly half the global average. In density terms, the gap is even wider. It is USD 97 per person in India versus USD 943 globally. This difference highlights how much lower insurance spending per individual remains in India.

The numbers from the IRDAI Annual Report 2024-25 suggest that India is not moving backward, but it is moving slowly. Insurance coverage is inching forward, not accelerating.