India’s Insurance Sector Set To Surge Past Rs 25 Lakh Crore by 2030: IBAI Report | Business News

Last Updated:July 28, 2025, 12:47 IST

India’s insurance industry may double from Rs 11 lakh crore in 2024 to Rs 25 lakh crore by 2030, says a report by IBAI and McKinsey. Insurance penetration could rise to 5%.

The report, titled ‘Leading the Path to Insurance for All: Broker of the Future’, outlines the strategic role brokers can play in achieving this growth and supporting the government’s vision of ‘Insurance for All by 2047’.

India’s insurance industry is poised for massive expansion and could more than double from Rs 11 lakh crore in 2024 to Rs 25 lakh crore by 2030, according to a new report launched by the Insurance Brokers Association of India (IBAI) in collaboration with McKinsey & Company. The report was unveiled during IBAI’s 24th Foundation Day in Mumbai by Maharashtra Governor C.P. Radhakrishnan.

It also added that India’s insurance penetration could accelerate to 5% from 3.7%, bringing it closer to the global average of 6.8%.

The report, titled ‘Leading the Path to Insurance for All: Broker of the Future’, outlines the strategic role brokers can play in achieving this growth and supporting the government’s vision of ‘Insurance for All by 2047’. It projects insurance penetration to rise from 3.7% to 5% by 2030, closing in on the global average of 6.8%.

In the retail segment, among affluent and ultra-high-net-worth and high-net-worth customers (UHNI and HNIs are individuals with household personal financial assets over INR 8.5 crore) customers, 60% customers believe that their ideal life insurance cover should be 10 times their salary, yet only 30% have this cover, added the report. Similarly, in the institutional segment, 70 percent micro and small enterprises purchase insurance because of regulatory or client mandates.

The report identifies key growth drivers for the insurance sector:

• Bridging India’s 91% protection gap (one of the highest globally), remains critical – especially for mass-market customers and SMEs, which are the most vulnerable to losses from risk events

o Despite being the world’s fourth largest economy, India has lower insurance penetration when compared to developed economies. Only 1 in 2 Indians (above the age of 18 years) has life insurance, and 2 in 5 Indians has health insurance. This number drops to 1 in 4, if government schemes are excluded.

o While life insurance penetration is at 2.8%, there is a significant protection gap due to limited adoption of pure term protection.

o While 65% of India’s population lives in rural areas and contributes around 45% of the country’s GDP, only about 2% of life insurance branches are present in rural regions, highlighting a significant access gap

• Retail and SME segments will be the twin engines of growth

o Gross written premiums (GWP) in the retail segment have the potential to double and reach an opportunity of up to Rs 21 lakh crore, across life and non-life insurance in 2030. The mass-market segment is poised to contribute approximately 45% of the premium pool. This segment is volume-driven and although average ticket sizes remain low, its scale and growing awareness offer a meaningful opportunity despite the price sensitivity.

o Similarly, non-life GWP driven by the institutional segment has the potential to nearly triple to Rs 2.8 lakh crore by 2030. Health and property lines of business will drive around 80% of institutional premiums. India has 6 crore SMEs with less than 5% having any insurance. This segment contributes only about 10% of the premium pools today but is expected to grow the fastest i.e. 4 to 5 times by 2030.

Mr. Narendra Bharindwal, President, Insurance Brokers Association of India said, “India’s insurance sector is entering a new era of opportunity, with the potential to more than double by 2030. The growth, however, needs to be secured by fast focus on bridging the massive 91% protection gap that exists in the country. At this moment, brokers have a strategic inflection point. Moving away from merely intermediaries, brokers are becoming trusted advisors that will translate awareness into action and build trust in underserved markets. Regulations permitting, with access to growth capital and investments in digital capabilities, brokers would be able to scale, drive inclusion, and form the bedrock of India’s journey toward ‘Insurance for All’ by 2047. This empowerment must begin now.”

Varun Yadav

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More

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