Growth Dynamics of Life Insurance Business in India (2001-02 to 2022-23)

Abstract

This research paper examines the growth dynamics of India’s life insurance business during the post-IRDAI liberalization period (2001-02 to 2022-23), focusing on underlying economic, financial and sector-specific factors. The entire period of study has been divided into two parts: the first span (2001-02 to 2010-11 and the second span (2010-11 to 2022-23), allowing for in-depth analysis of growth trend and trajectory. The various performance metrics pertaining to premium volume, premium density and penetration reveal that there was a discernible slowdown in the second span as compared to the first span. Component-wise and sector-wise analysis shows that both public and private sectors posted significantly higher growth in New Business as well as Renewal Premium during the first span vis-à-vis the second span. Further, the private sector markedly outpaced public sector in business growth. However, the impressive growth witnessed by the private sector was beset with substantially higher degree of instability. The investigation also highlights the role played by economic, financial and sector-specific factors in affecting the course of growth. The paper also suggests policy measures to reduce the ‘Life Insurance Protection Gap’.