Insurance Sector

Until 2021, foreign investors could hold up to 49% of an Indian insurance company. In the Budget speech of 1 February 2021, the Finance Minister proposed raising the limit to 74% and allowing foreign ownership and control with safeguards, including a majority of resident Indian directors and key managers. The Insurance (Amendment) Act, 2021 received assent on 25 March 2021. Between 31 March 2014 and 31 March 2025 the number of insurers and reinsurers grew from 53 to 74, and yearly premiums from ₹3.94 lakh crore (2013-14) to ₹11.93 lakh crore (2024-25).

Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 on 17 December 2025, and it received assent on 20 December 2025. The Act amends the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the IRDA Act, 1999, and raises the foreign investment limit in Indian insurance companies from 74% to 100%, as announced in the Budget speech of 1 February 2025. It also cuts the net owned fund required of foreign reinsurers from ₹5,000 crore to ₹1,000 crore, raises the maximum penalty for breaking insurance law from ₹1 crore to ₹10 crore, and creates a Policyholders' Education and Protection Fund. Amended rules on foreign investment in insurance companies were notified on 30 December 2025.

IRDAI registers and supervises life, general, health and reinsurance companies and the intermediaries who sell their policies. Life insurance makes up about 74% of premium income and 91% of the sector's assets under management, and health insurance is the largest non-life line, at 41% of gross domestic premium. Individual life and health insurance policies have been exempt from GST since 22 September 2025, and in 2024 IRDAI cut the moratorium period in health insurance, after which claims cannot be refused for non-disclosure except for fraud, from eight years to 60 months. IRDAI's Bima Sugam regulations, dated 20 March 2024, provide for an insurance electronic marketplace: a digital public infrastructure, set up by a not-for-profit company, for buying, selling and servicing policies, settling claims and redressing grievances.

Penetration has not kept pace with premium growth: after 4.2% in 2020-21 and 2021-22 it fell to 4% in 2022-23 and 3.7% in 2023-24 and 2024-25, when life insurance penetration slipped from 2.8% to 2.7%. Density, premium per person, rose from USD 95 to USD 97 in 2024-25. India was the 10th largest insurance market by premium volume in 2024, with 1.8% of world premiums, according to the Swiss Re report cited by IRDAI. IRDAI's goal of 'Insurance for All by 2047' aims for every citizen to have adequate life, health and property insurance and every enterprise suitable risk protection.

3.9% → 4.2% → 3.7% insurance penetration (2013-14, 2021-22, 2024-25). USD 52 → USD 97 insurance density (2013-14 → 2024-25). ₹3.94 lakh crore → ₹11.93 lakh crore total premium (2013-14 → 2024-25). 41.84 crore policies issued and ₹8.36 lakh crore in claims paid (2024-25); assets under management ₹74.44 lakh crore (31 March 2025). 53 → 74 insurers and reinsurers (31 March 2014 → 31 March 2025). 97.82% of individual death claims paid by number (2024-25). Sources: IRDAI Annual Report 2024-25 and Handbook on Indian Insurance Statistics 2024-25; PIB PRID 2216048 (19 Jan 2026), PRID 2206011 (18 Dec 2025) and PIB backgrounder (23 Apr 2026); Budget speeches 2021-22 and 2025-26; Gazette of India.