Opportunities Of Life Insurance Business In India The overall life insurance penetration in India is fairly low at 3.2 per cent. Given the low insurance penetration in the country, expansion into Tier 2 and Tier 3 cities is expected to further drive growth, says Keki Mistry, chairman, HDFC Life

The life insurance industry in India grew by 2 per cent both in terms of new business premium as well as number of policies during FY24. Private Insurers grew by 12 per cent on premium basis and 9 per cent in terms of number of policies during the year. The new business premiums of Indian life insurers reached a record high of INR 3.78 Lakh crore for the year ending March 2024. In this context, HDFC Life reported a 15 per cent year-on-year (Y-o-Y) increase in net profit to INR 478 crore in the April-June quarter of FY25 (Q1FY25), aided by 18 per cent Y-o-Y growth in its back book.

"Being a largely under-insured market, India has huge potential for growth. The overall life insurance penetration in India is fairly low at 3.2 per cent. Given the low insurance penetration in the country, expansion into Tier 2 and Tier 3 cities is expected to further drive growth," said Keki Mistry, chairman, HDFC Life.

In the past couple of years, the regulator has been driving the objective of "Insurance for All by 2047". Some of the noteworthy regulatory initiatives include, increased commercial and operational flexibility due to expenses of management, increased limits of raising sub debt, Bima Trinity of Vistaar, Vahak and Sugam, introduction of state level insurance committees and allowing insurers to open new branches without needing prior approval of the regulator and more recently, offering increased payouts in case of early policy surrenders by customers.

Explaining the regulatory support in the sector, the chairman added, "IRDAI may also consider implementing a risk-based supervision model, like in the banking industry. It will lay down principles for management of operational, market and governance risk; and the insurance companies will be responsible for monitoring the same. These regulations would increase ease of doing business, encourage development of longer-term products, and improve persistence, thereby creating value for customers."

HDFC Life recorded a market share of 15.4 per cent amongst the private sector companies and an overall market share of 10.4 per cent. The company's AUM stood at INR 2.92 lakh crore and embedded value stood at INR 47,468 crores, as on March 31, 2024. The company's objective is to capitalize on the macro-opportunities by expanding presence in a calibrated manner, as well as building a future-ready business through tech-led transformation. The chairman was speaking at the HDFC Life's 24th Annual General Meeting.