4 days ago
India’s Insurance Protection Gap Is Concentrated in Non-Life Cover
India has made it much easier for people to open bank and investment accounts.
However, many people still do not have enough insurance.
Insurance covered an amount equal to 3.7% of India’s economy, compared with 7.3% globally.
Life insurance is closer to the global level, but other insurance, such as health and motor cover, is far behind.
Health insurance is growing quickly and covers more people than before.
Still, including government programs, only about 39% of the population has health insurance.
Rising medical costs, longer lives and climate risks may make insurance more important.
McKinsey says digital tools, new rules and artificial intelligence could help insurers serve more people.
India’s overall insurance penetration was 3.7% of GDP, compared with a 7.3% global benchmark.
Life insurance penetration reached 2.7%, while non-life insurance stood at just 1% of GDP.
Adult bank-account ownership rose to 89% in 2025, but in-force individual life policies stayed near 330 million.
Health insurance represented about 38% of general insurance and grew at roughly 17% annually from FY2022 to FY2025.
McKinsey identified digital infrastructure, regulatory reforms and AI as possible ways to expand insurance protection.
- Who
- McKinsey & Company, with comments from McKinsey Partner Abhilash Sridharan, assessed India’s insurance protection gap.
- What
- India’s insurance penetration was reported at 3.7% of GDP, with the largest shortfall in non-life insurance.
- Where
- India.
- When
- The figures cover periods through 2025 or FY2025, with some comparisons extending to FY2026.
- Why
- The gap is concentrated in general insurance, while rising healthcare costs, longer life expectancy, climate-related risks and income volatility may increase demand for protection.
Key facts
- Overall insurance penetration
- 3.7% of India’s GDP, versus a 7.3% global benchmark.
- Life insurance penetration
- 2.7% of GDP, compared with a 3.0% global benchmark.
- Non-life insurance penetration
- 1.0% of GDP, compared with a 4.3% global benchmark.
- Health insurance share
- Approximately 38% of the general insurance market.
- Health insurance growth
- About 17% CAGR between FY2022 and FY2025.
- Population with health coverage
- Around 39%, including government-sponsored schemes.
- Individual life policies
- Approximately 330 million in-force policies from FY2017 through FY2025.
Sources
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