Market players: from monopoly to diversification
Life Insurance Corporation (LIC), a central public sector company, has played a vital role in the insurance market since its establishment in 1956. When the Insurance Act of 1938 led to the nationalization of the insurance industry, LIC took over 245 foreign insurers on behalf of the government. Over time, LIC has expanded its network of agents and branches allowing it to serve a range of consumers in India and provide them with security.After holding a monopoly for more than four decades, the liberalization efforts in India during the 1990s brought about changes in the market. Furthermore, the enactment of the Insurance Regulatory and Development Authority Act in 1999 paved the way for private players to enter the insurance industry leading to increased diversification.
Companies like SBI Life Insurance, HDFC Life Insurance, and ICICI Prudential Life Insurance dominate the private sector and have introduced products tailored to meet the needs of the population. Moreover, they are leveraging technology to enhance customer experiences by offering policy purchases, digital claim settlements, and personalized support services. Their strategic marketing initiatives such as bancassurance, direct marketing, and marketing through e-commerce have also played a role in raising awareness about insurance across India.
Insurtech: revolutionizing life insurance in India
This rise in life insurance penetration post-pandemic, despite being under the global average , can be partly attributed to the rapid digitization of the sector, driven by the growth of insurtech in the country.Startups like Digit Insurance and Acko Insurance lead the insurtech sector by raising a significant amount of funding. The insurtech unicorn, Policybazaar, was valued at a multi-billion-dollar figure. These successes are indicative of the broader trend in the life insurance market in India, which is poised for growth. This growth is driven by the ongoing integration of technology and the creation of customer-focused insurance products and services. Despite facing challenges such as digital transformation and ESG concerns, the market continues to thrive, demonstrating the resilience and adaptability of the industry.
