Indian insurance market structure
As of 31 March 2019, the Indian insurance market had 70 operators, divided into:
- 27 non-life insurance companies,
- 24 life insurance companies,
- 7 Stand-Alone Health Insurers (SAHI), insurance companies specialized in health business,
- a national reinsurer (GIC Re),
- 11 foreign reinsurance subsidiaries.
LIC of India (LIC), the only state-owned life insurance company, accounts for 65% of life premiums and almost 50% of all market premiums all classes combined.
Read also | Indian insurance martket in 2020
Indian insurance market structure: 31/3/2015 - 31/3/2019 period
Market players | 31/03/2019 | 31/03/2015 | ||||
---|---|---|---|---|---|---|
Public sector | Private sector | Total | Public sector | Private sector | Total | |
Life insurance companies | 1 | 23 | 24 | 1 | 23 | 24 |
Non-life insurance companies | 6 | 21 | 27 | 6 | 22 | 28 |
Reinsurance companies* | 1 | 11 | 12 | 1 | - | 1 |
Stand-Alone Health Insurers (SAHI)** | - | 7 | 7 | - | - | - |
Total | 8 | 62 | 70 | 8 | 45 | 53 |
* Including the branches of foreign reinsurers
** Companies specialising in health insurance
Read also | Indian life insurance market
Insurance distribution in India
India has an extensive distribution network made up of direct sales offices and a large number of intermediaries.
Direct distribution offices
Life network
The direct distribution of products is carried out through the offices of 24 life insurance companies. The public insurer LIC alone owns 43% of the life network with 4 932 offices out of a total of 11 279 spread over the Indian territory.
Distribution of direct life offices by type of insurance company
Life companies | 2015 | 2016 | 2017 | 2018 | 2019 |
---|---|---|---|---|---|
Private companies | 6 156 | 6 179 | 6 057 | 6 204 | 6 347 |
Life Insurance company (LIC) | 4 877 | 4 892 | 4 897 | 4 908 | 4 932 |
Total life | 11 033 | 11 071 | 10 954 | 11 112 | 11 279 |
The majority of life offices, that is 38.4% of the total, are located in semi-urban areas. Urban areas have 35.1% of outlets. All major metropolitan cities have 24.5% direct offices. The remaining 2% is located in rural areas.
Non-life network
Between 2018 and 2019, 270 new non-life direct offices appeared on the market. Public insurance companies own 76% of this network with 8 150 offices out of a total of 10 695. Metropolitan, urban and semi-urban areas account for 87.5% of the non-life network.
Breakdown of non-life direct network per type of company
Non life companies | 2015 | 2016 | 2017 | 2018 | 2019 |
---|---|---|---|---|---|
Public companies | 8 120 | 8 331 | 8 518 | 8 296 | 8 150 |
Private companies | 1 742 | 1 869 | 1 946 | 2 043 | 2 459 |
Specialized companies | 87 | 83 | 83 | 86 | 86 |
Stand-Alone Health Insurers (SAHI)** | 458 | 520 | - | - | - |
Total non life | 10 407 | 10 803 | 10 547 | 10 425 | 10 695 |
*As at 31 March of each year.
** As from 2017, the SAHI network is no longer accounted with the one of non-life companies.
Direct network of Stand-Alone Health Insurers (SAHI)
The Stand-Alone Health Insurers (SAHI), that is to say the insurance companies specializing in the health class of business, have 883 direct offices by 31 March 2019 against 775 by 31 March 2018. Half of these offices are located in metropolitan regions against 40% in urban areas and 10% in semi-urban areas. There are no SAHI offices in rural areas.
Number of direct Stand-Alone Health Insurers (SAHI) offices
2016 | 2017 | 2018 | 2019 | |
---|---|---|---|---|
Aditya Birla | - | 10 | 60 | 61 |
Apollo Munich | 101 | 110 | 158 | 186 |
Cigna TTK | 16 | 19 | 19 | 23 |
Max Bupa | 27 | 28 | 30 | 40 |
Reliance Health | - | - | - | 2 |
Religare | 56 | 61 | 74 | 111 |
Star Health | 320 | 367 | 434 | 460 |
Total | 520 | 594 | 775 | 883 |
Insurance agents
The network of insurance agents operates under the supervision of IRDAI (market control authority). It includes:
- agents practicing on an individual basis,
- agents operating as a legal entity (Corporate Agents).
The total number of insurance agents (individual and corporate agents) operating on the market amounted to 2 716 003 as of 31 March 2019 against 2 489 117 a year earlier, up 9% compared to the same period of 2018.
Agents practicing individually
They operate in life insurance where their number is very high. As of 31 March 2019, IRDAI listed 2 194 747 individual agents having a license to distribute life products.
Breakdown of individual agent per type of company
31/3/2018 | 31/3/2019 | |
---|---|---|
Private sector workers | 933 856 | 1 015 518 |
LIC | 1 148 811 | 1 179 229 |
Total individual agents of life companies | 2 082 667 | 2 194 747 |
Breakdown of individual agent per gender
31/3/2018 | % | 31/3/2019 | % | |
---|---|---|---|---|
Women | 579 220 | 27.8% | 603 208 | 27.4% |
Men | 1 503 447 | 72.2% | 1 591 539 | 72.6% |
Total | 2 082 667 | 100% | 2 194 747 | 100% |
Corporate Agents
Also acting under the control of IRDAI, Corporate Agents can take several legal forms: banking companies, non-banking financial companies, cooperative companies, limited companies, limited liability companies.
Corporate Agents operate in life and non-life insurance. Their number amounted to 606 as of 31 March 2019, an increase of 15% over one year.
31/3/2018 | 31/3/2019 | |
---|---|---|
Corporate Agents | 526 | 606 |
Global structure of insurance agents network in India
31/3/2018 | 31/3/2019 | |
---|---|---|
Life insurance individual agents | 2 082 667 | 2 194 747 |
SAHI individual agents | 405 924 | 520 650 |
Corporate Agents | 526 | 606 |
Grand total | 2 489 117 | 2 716 003 |
Read also | Indian insurance at regional and global level
Insurance Marketing Firm (IMF)
This is a new insurance distribution channel introduced in 2015. This network, strictly regulated by IRDAI, distributes life, non-life and health products. IMFs operate on the principle of "open architecture". They are allowed to market insurance products from up to two life companies, two non-life companies and two mutuals. They operate as one-stop shops, also distributing financial products from other institutions such as the Post Office, pension funds (Pension Fund Regulatory & Development Authority PFRDA), etc.
By the end of March 2019, India had 272 IMFs against 212 a year earlier, that is an increase of 28% in one year.
Web Aggregator
The regulatory authority also authorizes "Web Aggregators" to distribute insurance products. These are web interfaces (comparators) for comparing and distributing insurance policies online. This new distribution channel increases the penetration rate of insurance via digital means. The activity is regulated and supervised by IRDAI. The number of Web Aggregator approved as of 31 March 2009 is 27.
Brokers
Brokers have been authorized to operate on the Indian market since 2003. Their number stood at 437 at the end of March 2019. Among them, 371 are specialized in a direct insurance (life or non-life), 61 have the status of composite brokers, empowered to underwrite life and non-life risks. Only 5 brokers are specialized in reinsurance.
Other networks
Other insurance distribution networks also exist in the Indian market. These are in particular:
- TPA Health Services: There are 25 third-party paying companies operating on the health market.
- Insurance Repositories: Sales network of insurance policies offering the underwriter the possibility of modifying his contract. Created in 2013, this distribution tool is the first of its kind in the world. The market has four Insurance Repositories approved by the authorities.
- Insurance Self Network Platform (ISNP): Created in 2017 by IRDAI, ISNP is a web portal that allows insurance companies and intermediaries to market insurance products online.