Life Insurance Penetration and MarketShare of LIC
• Insurance penetration peaked during COVID-19 but requires long-term strategies for sustained growth. LIC’s market share has gradually declined, signaling opportunities for private insurers to capture more business. High resolution rates prove the industry’s reliability and commitment to policyholders. Disposal rate (which is defined as % of claims disposed of within a time frame) fluctuations highlight the need for digital transformation and faster claim settlements.
• Insurance penetration represents the ratio of total premiums to GDP. In 2015, penetration stood at 2.6% and gradually rose to 2.82% in 2020. The COVID-19 period (2021–22) saw penetration peak at 3.2%, as demand for protection plans surged due to heightened risk awareness. However, penetration has slightly declined since then, falling to 2.8% in 2024. This shows that while insurance awareness improved during the pandemic, sustaining long-term growth requires continuous customer education and innovative products.
• The Life Insurance Corporation of India (LIC) has historically dominated the Indian market. From 73% market share in 2015, LIC’s share steadily declined to 57.32% in 2024. This decline is largely due to the rise of private players offering competitive products, digital platforms, and innovative solutions. Despite the fall, LIC continues to hold a majority share, proving its trust and legacy in Indian households. However, the trend clearly indicates increasing competition from private insurers.
| Particulars in % | 31-03-2015 | 31-03-2016 | 31-03-2017 | 31-03-2018 | 31-03-2019 | 31-03-2020 | 31-03-2021 | 31-03-2022 | 31-03-2023 | 31-03-2024 |
|---|---|---|---|---|---|---|---|---|---|---|
| Life Insurance Penetration in India (%) | 2.6 | 2.72 | 2.72 | 2.76 | 2.74 | 2.82 | 3.2 | 3.2 | 3 | 2.8 |
| Market share % of LIC (based on Total Premium) | 73 | 73 | 72 | 69 | 66 | 66 | 64 | 62 | 60.67 | 57.32 |
| Resolution rate | 97.82 | 99.56 | 99.80 | 99.87 | 99.95 | 98.26 | 99.88 | 99.92 | 99.76 | 99.87 |
| Disposal rate | 76.22 | 90.72 | 92.66 | 64.04 | 70.45 | 80.43 | 91.09 | 93.73 | 94.25 | 87.34 |
Units: %
• The claim resolution rate (percentage of claims settled) has consistently remained strong across the decade. From 97.82% in 2015, the industry achieved near-perfect resolution rates, with 99.92% in 2022 and 99.87% in 2024.
• Disposal Rate improved from 76.22% in 2015 to above 90% in 2021–23, reflecting better operational efficiency and digitization.
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