India's insurance sector AUM is projected to grow to $11 trillion by 2047 from $0.7 trillion now, says BCG Report

India's insurance sector is set to witness remarkable growth, with its Assets Under Management (AUM) projected to surge to $11 trillion by 2047 from $0.7 trillion in 2023, according to a report by Boston Consulting Group (BCG) and India InsurTech Association (IIA).

This expansion aligns with India's broader economic goals, including achieving "Health for All" by 2047, as the country's GDP is expected to reach $ 30 trillion by then.

The report also highlighted that India's financial assets are also anticipated to grow significantly, climbing to $120 trillion by 2047 from the current $6.4 trillion. However, despite the promising outlook, insurance penetration in the country remains low, particularly in the health and non-life insurance segments.

As per the data in the report, India's health insurance penetration is just 0.31%, far below the levels seen in countries like the United States (5.26%) and China (0.77%). Non-life insurance penetration in India stands at 1%, compared to 1.8% in China and 9.3% in the US.

On the other hand, life insurance penetration in India is relatively strong at 2.8%. However, it still falls short of the global average of 2.9%.

The report stressed the need to increase insurance coverage, particularly in health insurance, where 45% of medical expenses are still borne out-of-pocket by individuals.

Multiple macroeconomic tailwinds are already driving growth in the industry. The goal is to achieve 100% coverage for all citizens and reduce out-of-pocket medical expenses to less than 10%. India envisions becoming the world's third-largest insurance market, with over 10 companies in the global top 50 and more than 100 insurtechs operating at scale.

It said, "Driving penetration is a key focus area; Health insurance is most underpenetrated, with 45%+ medical spends still out of pocket."

The report highlights that while India has made significant strides in improving insurance penetration, there is considerable scope for growth, especially in the health and non-life insurance segments.

Achieving these goals will be crucial for securing the financial health and well-being of the country's population in the coming decades.