New Delhi, 11 September (IANS). In India’s life insurance industry, the compound annual growth rate (CAGR) is expected to be 14.5 percent during FY 235. This information was given in a report released on Thursday.
The Financial Services Organization, PL Capital, said in a report that the Indian life insurance industry has increased by 11 percent of the annual growth rate (CAGR) to Rs 1,203 billion in FY 25 in the last two decades (FY 2005–25).
The report stated that the recently announced GST exemption will improve the affordability of the insurance sector, increase continuity and increase penetration, which will strengthen long -term development.
However, this can cause short -term profitability challenges, as the insurance companies’ input tax credits will be eliminated.
Despite the continuous expansion in recent decades, the access of life insurance in India remains significantly below global standards.
The insurance sector had a 2.8 percent stake in the GDP (GDP) in FY 24, it is much lower than the average of 5.6 percent of the developed markets. Similarly, the insurance density in India was just $ 70 per person per person, while in developed economies it was $ 3,182.
The report stated that this difference highlights a multi-subject opportunity for the industry, especially when families are allocating more part of their savings in financial instruments.
The report said that the nominal GDP is expected to grow at a rate of 10.5 percent annually, as well as with increasing financial awareness, life insurance will emerge as an important pillar of India’s domestic balance sheet.
According to the report, structural factors such as lack of social security trap, increasing middle class and rising life expectancy will promote demand for safety and annuity products.
The report highlighted that historically, the Unit Linked Insurance Plan (ULIP) has maintained its dominance in the product mixture, which has benefited the benefits of the stock market by rapid and attractive in the stock market.
However, the report estimated that the share of customers towards non-linked options will soften the share of ULIPs.
According to the report, ULIP’s share has seen an increase in listed insurance companies (35–65 percent in FY 25, while in FY 23 it was 16–55 percent).
-IANS
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