Trends of Microinsurance in India

Developing a strategic perspective towards microinsurance

This Focus Note aims to capture the overall trends in the Indian microinsurance industry.

In recent years, India has achieved an insurance density of US$46.6 and an insurance penetration of 4.7%. Yet, 90% of the Indian population, and 88% of the Indian workforce are still excluded from any kind of insurance cover. Microfinance in India has largely been driven by credit products, and microinsurance has remained a secondary choice for financial inclusion. Recently, however, the following important developments have taken place in the Indian microinsurance sector:

  • Evolution of microinsurance legislation;
  • Development of life microinsurance, health microinsurance and various kinds of agricultural insurance.

India’s microinsurance sector continues to be driven by supply-led interventions. Moreover, insurance providers still seek government subsidies and donor funding to achieve financial viability rather than designing market-led, sustainable schemes. Hence, a strategic perspective towards microinsurance together with innovations in technology and assessment of client demand holds the key to the future of microinsurance in India.

About this Publication

By Mukherjee, P.