Evaluation of Insurance Penetration and Insurance Density in India after Insurance Sector Reforms
Sameesh Khunger
Assistant Professor
Department of Business Administration, Chaudhary Devi Lal University, Sirsa
sameesh@cdlu.ac.in
Vipin Kumar
Assistant Professor
Department of Business Administration, Chaudhary Devi Lal University, Sirsa
vipinapc@cdlu.ac.in
(Abstract)
The present study attempts to compute and analyze the growth of life insurance business using two parameters insurance penetration and density in India post insurance sector reforms i. e. from 2001-02 to 2021-22 and to make an international comparison of these parameters. The present study is of analytical nature and based on secondary data gathered from Annual Reports of IRDA of different years. The study shows that there is an upward growth trend in total life Insurance premiums underwritten by the public sector, private Sector and Industry total in India. In the case of Insurance penetration and density, in the financial year 2001-02 insurance penetration in India was only 2.71 percent and then increased to 5.20 percent in the year 2009-10 which was the highest during the period under study but in 2021-22 it again decreased to 4.20 percent showing a fluctuating trend. In case of insurance density it was 11.50 US dollars in 2001-02 which continuously increased to 64.40 US dollars in the year 2010-11 and again declined continuously up to year 2015-16 to 54.70 US dollars after that it followed a continuous growth pattern up to year 2021-22 to 91 US dollars. The International Comparison of Insurance Penetration and Insurance Density reveals that life insurance penetration the global average is 3.00 percent and our country scored 3.20 percent which is in line with global average but in case of non life insurance the global average is 3.90 percent but our country has scored only 1.0 percent which is almost one fourth of the global average.. In case of insurance density the global average is 382, 492 and 874 US dollar in Life insurance, non life insurance and total industry respectively, but our country’s insurance density is only 69, 22 and 91 US dollar in Life insurance, non life insurance and total industry respectively. The results of ANOVA statistics reveal that there is significant difference in the mean values of insurance density and penetration of life, non-life and industry total.
Keywords: Insurance Penetration, Insurance Density, LIC, Life Insurance, Non-Life Insurance, GDP, IRDA
