India insurance brokerage market is projected to witness a CAGR of 10.08% during the forecast period 2024-FY2032, growing from USD 27.41 billion in FY2024 to USD 59.10 billion in FY2032. The market has grown dramatically due to key driving forces, such as improved income growth, which has enabled individuals and business organizations to purchase insurance products to secure uncertainties. Increased awareness about insurance is spurred through different government campaigns and awareness initiatives to educate citizens.
Digitalization and embracing online platforms, mobile applications, and chatbots have made the insurance industry easier for policyholders to buy policies and let a broker reach client much better. Even the insurance sector, particularly life insurance and pension plans, has benefited from initiatives undertaken by the government in the form of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Atal Pension Yojana (APY).
With relieved policies regarding FDIs, capitalizing on the much-needed provision in the industry spurs the growth of the insurance sector. This has led to growth in e-commerce, which has necessitated growth in insurance services, mainly in verticals such as cyber insurance and logistics insurance. In the wake of the constantly changing risk landscape, from natural disasters to cybercrime, the importance of holistic insurance coverage has emerged. Moreover, a certain smattering of favorable government regulations and interventions has helped foster growth for the insurance sector. At present, these factors together contribute to dynamic and robust growth in India insurance brokerage market.
For instance, in December 2022, according to the Insurance Regulatory and Development Authority of India (IRDAI), India is projected to become the world’s sixth-largest insurance market within the next decade, surpassing countries such as Germany, Canada, Italy, and South Korea. In addition to favorable economic conditions, the regulator plans to implement proactive measures aimed at accelerating the sector’s growth.
Awareness of Adequate Insurance Coverage and Evolving Risk Factors to Drive Market Growth
Campaigns by the Indian government and massive digital drives to raise awareness of the need for insurance have increased the penetration of insurance in the country. Due to the perceived value of insurance, the demand for the market is on the rise. High-risk factors such as natural disasters and cyber threats add to the demand for more comprehensive insurance solutions. Growth in disposable incomes, especially from the expanding middle class in India, further boosts the insurance sector, where more people can invest in security policies. Such a rise in demand is immediately reaping benefits for India insurance brokerage market as brokers guide consumers and assist them in choosing the most suitable policies. Growing risk factors are a major growth driver in India insurance brokerage market. The high rise in natural disasters, such as floods, cyclones, and earthquakes, throughout the nation has put forward a rising demand for property and casualty insurance. Apart from this, the spread of different cyber risks, such as data breaches, ransomware attacks, and identity theft, has created a need for cyber insurance. The mere fact that digital transformation is currently being witnessed in various industries means firms and individuals are looking for cover to cap any losses likely to occur in case of cyber risks, making cyber insurance one of the fastest-growing market segments.
Besides, increasing uncertainties in a more unstable political scenario, the health pandemic situation, and geopolitics are compelling people to demand comprehensive coverage. The increasing complexity of risk requires insurance to adapt to these emerging conditions. It has, thereby, energized the brokerage market for insurance services, as brokers help clients with changing their demands for insurance services.
For instance, in September 2024, Tata AIA Life Insurance Co Ltd (Tata AIA) launched a US dollar-denominated life insurance product tailor-made for non-resident Indians through a joint venture between Tata Sons Pvt Ltd (Tata Sons) and AIA Group Ltd (AIA). The first set of products that the company will offer from its GIFT City branch includes the Life Protect Supreme term insurance plan with a return guaranteed in USD. Most of the plans cover any kind of death, accident, disability, and critical illness, and most benefits are paid up until age 100.
Government Initiatives and FDI to Act as a Catalyst
The Pradhan Mantri Jeevan Jyoti Bima Yojana, Atal Pension Yojana, and Ayushman Bharat schemes are the government initiatives that have added significant growth to India insurance brokerage market. These schemes have increased the penetration of below-poverty groups, unorganized sector workers, and others. With an increased number of insured populations through these schemes, the demand for insurance brokerage services to help these individuals has gained the required coverage, hence causing an increase in the demand for the products offered by the industry of insurance brokerage.
Increased FDI in the insurance sector has played a focal role. Raising the permissible FDI limit from 49% to 74% has allowed foreign investments to inject capital into the sector with increased competition and innovation between the players in the insurance companies. The entry of foreign players increased their appeal and variety of products while improving the service offerings. Improving market participation and, at the same time, financial stability leads to a dynamic and competitive atmosphere that enhances the interest of consumers and intermediary agents or insurance brokers.
For instance, in February 2024, under Pradhan Mantri Fasal Bima Yojana (PMFBY), it has insured 56.96 crore applications, of which the claims of USD 1.84 trillion (INR 1.54 lakh crore) have been paid, according to the Press Information Bureau of Government of India. The scheme is meant to provide an easy, inexpensive, and comprehensive crop insurance solution to Indian farmers. It encompasses all kinds of non-preventable risks of natural causes pre-sowing to harvest time, providing critically essential financial support when crop failure is caused by natural calamities, pests, or diseases.
Technological Advancements to Fuel Market Growth
Technological advancements fuel the growth of India insurance brokerage market as it enhances efficiency and ease for customers. Artificial Intelligence streamlines underwriting, claims, and customer service by reducing human efforts and errors. The Internet of Things presents data in real time and increases the effectiveness of risk assessment while personalizing the insurance solution offered. Blockchain further helps improve the process by removing fraud and generating trust since the transactions involved are secured, transparent, and tamper-proof. Beyond this, data analysis helps the broker better understand customer behavior, predict potential risks, and come up with customized insurance products, thereby propelling the industry’s growth.
Brokers are focusing on proactively communicating with customers during the information phase through personalizing interactions using diverse channels, which creates a blend of personal contact and digital tools to elevate support and claims. They provide consumers with personalized services across various channels such as email, phone, SMS, WhatsApp, and more. Staying at the top of the mind of the customer and reaching out to them helps build a strong customer relationship.
For instance, in March 2022, Mahindra Insurance Brokers Ltd. (MIBL) embarked on a major digitization drive in three business modules, motor, health, and commercial lines, to enhance growth. On its part, MIBL announced a tie-up with its healthcare arm, Tata 1 Mg, to offer customized health solutions for corporate employees and their families.
Life Insurance Type to Dominate Market Share
In India, insurance brokers primarily focus on life insurance due to its lucrative nature and high demand. In terms of overall market value, the life insurance and pension segment showcases a highly valued stream. This is primarily due to the increasing consciousness of financial security, which is most pronounced at the middle-class level. The government of India has introduced schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Atal Pension Yojana (APY) to further enhance life insurance penetration. As the economy grows and disposable incomes rise, people are investing in life insurance products that have high returns for longer terms, providing huge commissions for brokers. Brokers can extend their focus on this segment due to different life insurance products, such as term insurance, whole life, and ULIPs (Unit Linked Insurance Plans), providing an opportunity for brokers to cater to various customer needs.
For instance, in June 2024, India’s life insurance sector experienced a notable 14.8% year-on-year (YoY) increase in premiums, reaching USD 5.11 billion (INR 42,434 crore). This growth reflects a robust demand for insurance protection from individual and corporate consumers, underscoring the sector’s resilience and expanding reach.
Northern India Dominates the Insurance Brokerage Market Share
North region, especially the National Capital Region (NCR), dominates the share of India insurance brokerage market. NCR has one of the country’s largest economies, whose gross areas shelter hundreds of multinational corporations, financial institutions, and offices of governments. Due to this, the demand for insurance services is high for people and companies. With such a high population density in the region, the customer base in terms of insurance requirements is wide and diversified, which consequently raises the demand for specialized brokerage services. In the same respect, NCR has developed infrastructure with well-to-date communication and transportation networks that support effective business operations and service delivery. A favorable regulatory environment plays an important role as part of government policy in increasing financial inclusion and penetration of insurance services. Consequently, major insurance companies and brokerage firms in NCR would ensure that the marketplace stays competitive so that improvement, innovation, and better service offerings are kept at bay.
For instance, in November 2023, there was a 50 percent surge in inquiries regarding health insurance, with the air quality index (AQI) crossing 500 in NCR, according to PolicyBazaar’s data. In cases like cancer, where bills may soar from USD 35,689 (INR 30 Lakh) to USD 59,482 (INR 50 lakh) or even higher, and considering instances like lung transplants, around 40% of health insurance customers have opted for the USD 118,947 (INR 1 crore) plans, a significant increase from previous years when the standard cover was USD 5,948 (INR 5 lakh).
Future Market Scenario (FY2025 – FY2032F)
- In the upcoming years, India insurance brokerage market will witness a wave of customized and personalized insurance solutions. Through data analytics and AI, the brokers will offer bespoke policies to clients and businesses.
- The growth of e-commerce will create added demand for insurance services, more so in cyber insurance and logistics insurance, further pushing the expansion of the market.
- Advanced technologies, including AI, IoT, blockchain, and data analytics, would further heighten operational efficiency, improve customer experience, and drive innovation in product offerings.
- The government’s ongoing initiatives, such as the National Logistics Policy and Make in India, would continue to spur the growth of the insurance sector. The country’s improving infrastructure and fostering financial inclusion would continue to fuel market growth.
Report Scope
“India Insurance Brokerage Market Assessment, Opportunities and Forecast, FY2018-FY2032F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of India insurance brokerage market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between FY2025 and FY2032. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.
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