India’s insurance penetration and density: 2001-2017 Figure 1 shows the insurance penetration and density in India from 2001 to 2017. The sector has transitioned from being an exclusive State monopoly to a competitive market, but public-sector insurers hold a greater share of the insurance market even though they are fewer in number. These low penetration and density rates reveal the uninsured nature of large sections of population in India, and the presence of an insurance gap. The insurance penetration (ratio of total premium to GDP (gross domestic product)) and density (ratio of total premium to population) stood at 3.69% and US$ 73, respectively for FY18 (fiscal year 2017-18), which is low in comparison with global levels. The insurance industry in India has been growing dynamically, with total insurance premiums increasing rapidly, as compared to global counterparts. This article traces the journey of the Indian insurance sector, and underlines issues such as low penetration and density rates, inadequate investment in insurance products, and the dominant position and deteriorating financial health of public-sector players. While India’s insurance sector has been growing dynamically in recent years, its share in the global insurance market remains abysmally low.
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