The insurance industry of India is one of the premium sectors that is experiencing upward growth. This means growth in income and awareness, currently, India is the 5th largest life insurance market in the world, growing at 32 to 34% every year. The industry has gone through multiple transformations in terms of development, growth, modification and creation of amendments.
The change has opened up the doors for new avenues, and with that IRDAI is determined to achieve a mission of ‘Insurance for all by 2027”. Below are several other facts about the insurance industry that you must know.
Fact 1: First Insurance Company
The first insurance company called the Bombay Mutual Life Assurance Society was founded in 1870. It was the first company that equalise the insurance premium rates charged to Indians. During the British Raj, the Indians had to pay more money than the Britishers. After noticing the injustice, the first company was started that charged Indians the same rate as Britishers.
Fact 2: Rise of Digital Insurance
Like other industries, the insurance industry also adopted digital modes, and because of this many customers benefit by buying the insurance policies online. In the market, multiple insurance web aggregators came and provided multiple advantages such as paying premiums online, buying any policy online, and choosing any option as per the requirement.
These days buying policy is normal, every person uses the online method to buy, renew and compare policies. As per Livemint, around 65% of Indian people purchase policies online. However, the partnership between insurance companies and digital platforms is creating a bridge of $369 billion in health protection gap.
Fact 3: Insurance Covers Mental Ailments
In recent years, people become more aware of mental health issues and paying attention to them. Now people understand that their mental health is worth their peace of mind and emotional health. The Indian government made the Mental Health Act, 2017 that enacted on 29 May 2018.
Before 2018, no insurance plan covered your mental health issues but the Insurance Regulatory and Development Authority of India made provisions for mental health illness coverage in all health insurance. In the treatment of mental illness, psychological disorders, stress and neural diseases, under health insurance.
Fact 4: Increase in Demand for Life Insurance Policy
Many people underestimate the need for life insurance but after COVID-19, the demand for life insurance policies increased. As per the report of Statista, the Life Insurance Corporation (LIC) has issued 21 million new individual policies and private insurers issued 7 million policies. The pandemic period was the period of a health crisis that set an upward trend in the purchase of life and health insurance policies. The importance of financial security increases and people purchase policies and this shift is still intact.
Fact 5: Claim Rejection
The insurance company write policy details in fine print, which most people don’t read and sign the policy. This profits the company as the insurers can subtly discourage certain claims or encourage specific behaviors that benefit the company. Other reasons for claim rejection are as follows:
- Minor errors and typos in documentation can lead to claim rejection.
- Not disclosing pre-existing medical conditions or hazardous hobbies can impact the policy rejection even if it’s not directly connected to the claim.
- Sharing life updates on social media related to risky behaviour such as rock climbing, skydiving, extreme sports, or piloting without informing the insurance company.
Some Other Facts About Insurance
- In the market, there are 57 insurers of which 24 are life insurers and 34 the non-life insurers. The LIC is the sole public sector company.
- The Indian insurance premium volume stands at $127 Billion as of 2021. It includes life insurance for 76% and non-life insurance for 24%.
- Customers are now starting to prefer digital modes for their insurance needs. Around 73% or 62% of the customers prefer the online mode for General Insurance and Health Insurance products (2020).
- Insurance agents have become more familiar with digital tools. Increasing that 63% of agents get comfortable with video-calling and >50% are amenable to virtual renewals. India is the 2nd largest internet user market become 1 billion internet users by 2026.
The Indian insurance industry is one of the fastest-growing industries in the world. This is a result of different factors such as disposable income, an increase in financial awareness and different government initiatives. According to the IRDAI, India will be the 6th largest insurance market in a decade and in this, the regulatory development will contribute.