Life and Non-Life Insurance Market Outlook, 2029

The insurance industry is a critical pillar of the global financial system, providing individuals and businesses with protection against various risks and uncertainties. Two of the main categories of insurance are life insurance and non-life insurance, which differ in their purpose, features, and benefits. Life insurance is a contract between an individual (the policyholder) and an insurance company. It provides financial protection to the policyholder's family or designated beneficiaries in the event of the policyholder's death. The main purpose of life insurance is to ensure that the policyholder's dependents are financially secure even in their absence.

Life insurance policies typically have a set duration, such as 10, 20, or 30 years, and offer a lump-sum payment upon the policyholder's death. The premiums paid by the policyholder are invested by the insurance company, and the policy may accumulate a cash value over time. Life insurance policies can be classified into various types, such as term life insurance, whole life insurance, and universal life insurance. Non-life insurance, also known as general insurance, is designed to protect individuals and businesses from financial losses resulting from unexpected events. It covers a wide range of risks, including property damage, liability claims, and personal injuries.

Non-life insurance policies typically have a shorter duration, often one year, and require the policyholder to pay premiums regularly. Non-life insurance policies are designed to provide financial assistance to policyholders when they need it most. In the event of a claim, the insurance company reimburses the policyholder for the covered losses, subject to the policy's terms and conditions.

According to the research report, the market is anticipated to cross USD 11 Trillion by 2029, increasing from USD 7.73 Trillion in 2023. The market is expected to grow with 7.17% CAGR by 2024-29. Driven by the increasing penetration of life insurance. As more individuals secure life coverage, it instills a sense of financial security, boosting consumer confidence.

According to the Press Information Bureau, India, in 2021, life insurance penetration in India stood at 3.2%, nearly double that of emerging markets and slightly higher than the global average. In 2022, life insurance premiums experienced a year-on-year growth of 10.2% with new ventures accounting for 45.5% of the total premiums collected by life insurance companies.

Growing awareness about the significance of financial security and the role of insurance is a key factor driving expansion in both the life and non-life insurance markets. As people become more informed about the risks associated with life events, health issues, property damage, and other unforeseen circumstances, they are increasingly inclined to invest in insurance policies. This awareness is often bolstered by educational campaigns, financial literacy initiatives, and widespread access to information, encouraging individuals & businesses to protect their assets and well-being through insurance coverage. The COVID-19 pandemic accelerated digital transformation in the life and non-life insurance sectors.

Insurers rapidly adopted online platforms, enabling seamless policy purchases and claims processing. Moreover, the crisis heightened awareness about the importance of insurance, driving demand for health and life coverage. Innovative products tailored to pandemic-related risks, such as health insurance and travel insurance, gained prominence. The pandemic prompted insurers to enhance customer experiences, fostering positive changes and paving the way for a more resilient industry.

Market Drivers

• Demographic Shifts: Aging populations and changing demographic trends, particularly in developed economies, drive the demand for life insurance. As people live longer, there's an increased focus on retirement planning, legacy creation, and passing on wealth to future generations, all of which necessitate life insurance coverage.
• Healthcare Costs and Longevity: Rising healthcare costs and advancements in medical technology contribute to increased life expectancy. Consequently, individuals seek life insurance not only for financial protection against premature death but also to cover healthcare expenses and ensure a comfortable retirement.
• Urbanization and Infrastructure Development: Rapid urbanization and infrastructure development in emerging markets drive the demand for non-life insurance, particularly property and casualty coverage. As cities expand, there's an increased need for insurance protection against risks such as property damage, natural disasters, and liability exposures.
• Globalization and Supply Chain Risks: Globalization has interconnected supply chains across industries, making businesses vulnerable to supply chain disruptions, trade disputes, and geopolitical risks. Non-life insurance products such as trade credit insurance, business interruption insurance, and supply chain risk management solutions help businesses mitigate these risks.

Market Challenges

• Low Interest Rates: Persistently low interest rates pose a significant challenge for life insurers, as they affect investment returns on policyholder premiums. Insurers must navigate the delicate balance between offering competitive policy returns and maintaining financial stability amidst a low-yield environment.
• Regulatory Compliance: Life insurance companies face stringent regulatory requirements, which continue to evolve in response to changing market dynamics and consumer protection concerns. Compliance with regulatory frameworks adds complexity to product development, distribution channels, and risk management practices.
• Catastrophic Events and Climate Change: The frequency and severity of catastrophic events, exacerbated by climate change, pose significant challenges for non-life insurers. Insurers must accurately assess and price climate-related risks, manage exposure concentrations, and enhance resilience measures to withstand the financial impact of natural disasters and extreme weather events.
• Cyber Risk and Data Privacy: The proliferation of cyber threats and data breaches present growing challenges for non-life insurers, as businesses and individuals seek protection against cyber risks. Insurers must develop comprehensive cyber insurance products, underwrite cyber risks effectively, and invest in cybersecurity measures to safeguard sensitive data and mitigate liability exposures.

Market Trends

• Digital Transformation: The life insurance industry is undergoing a digital transformation, with insurers leveraging technology to enhance customer experiences, streamline operations, and offer innovative products and services. This includes the adoption of artificial intelligence, data analytics, and digital platforms for underwriting, claims processing, and customer engagement.
• Personalized Offerings: Increasingly, life insurers are embracing personalized and customizable insurance solutions tailored to individual needs and preferences. This trend is driven by advances in data analytics, which enable insurers to segment markets more effectively, assess risk accurately, and offer personalized pricing and coverage options.
• Parametric Insurance Solutions: Parametric insurance, which pays out predetermined amounts based on predefined triggers such as weather events or seismic activity, is gaining traction in the non-life insurance market. Parametric solutions offer rapid claims processing, transparency, and certainty in payouts, making them well-suited for covering specific risks such as natural disasters and crop failures.
• Ecosystem Partnerships and Insurtech Collaboration: Non-life insurers are increasingly partnering with technology startups and insurtech firms to innovate and enhance product offerings, distribution channels, and customer engagement. Collaboration with ecosystem partners enables insurers to leverage emerging technologies, data analytics, and digital platforms to deliver value-added services and improve risk management capabilities.

Non-Life Insurance is leading in the insurance market due to its broader applicability and immediate relevance to a wide range of individuals and businesses, addressing tangible risks such as property damage, liability exposures, and supply chain disruptions.

Non-life insurance, also known as general insurance, holds a prominent position in the insurance market primarily because of its immediate and tangible relevance to individuals and businesses alike. Unlike life insurance, which addresses the more abstract risk of mortality, non-life insurance provides coverage against a diverse array of risks that individuals and businesses face in their day-to-day operations. These risks include but are not limited to property damage from natural disasters or accidents, liability exposures arising from bodily injury or property damage to third parties, and disruptions to supply chains due to unforeseen events such as trade disputes or geopolitical tensions.

Non-life insurance policies offer tangible benefits and financial protection against such risks, making them indispensable for individuals safeguarding their homes, vehicles, and valuables, as well as for businesses protecting their assets, operations, and liabilities. Moreover, the immediate relevance of non-life insurance ensures a consistent demand across various sectors and industries, driving its dominance in the insurance market. Additionally, the diverse range of non-life insurance products, including property insurance, casualty insurance, marine insurance, cyber insurance, and more, cater to specific needs and risk exposures, further solidifying its position as a leading segment in the insurance industry.

Furthermore, the increasing frequency and severity of natural disasters, cyber threats, and supply chain disruptions underscore the importance of non-life insurance in mitigating these risks and providing financial security to individuals and businesses. As a result, non-life insurance companies continue to innovate and evolve their product offerings, leveraging technology, data analytics, and strategic partnerships to better assess and manage risks while enhancing customer experiences and service delivery.

The agency distribution channel is leading in both life insurance and non-life insurance markets due to its personalized approach, customer-centric focus, and ability to provide comprehensive guidance and support to clients throughout their insurance journey.

The agency distribution channel holds a dominant position in both the life insurance and non-life insurance markets primarily because of its personalized approach and customer-centric focus. Unlike other distribution channels such as direct sales or online platforms, agency distribution relies on a network of professional agents who serve as intermediaries between insurance companies and clients.

These agents play a pivotal role in understanding clients' needs, assessing their risk profiles, and recommending suitable insurance solutions tailored to their specific requirements. One of the key advantages of the agency distribution channel is its ability to provide comprehensive guidance and support to clients throughout their insurance journey.

Agents act as trusted advisors, offering expert advice, explaining complex insurance products and terms, and helping clients navigate the intricacies of the insurance buying process. This personalized approach fosters trust and confidence among clients, leading to higher levels of customer satisfaction and retention. Moreover, agency distribution channels excel in building long-term relationships with clients, as agents often engage in ongoing communication and provide proactive support beyond the initial sale. Whether it's reviewing coverage options, assisting with claims processing, or addressing changes in clients' circumstances, agents are dedicated to ensuring that clients' insurance needs are met effectively and efficiently.

The agency distribution channel offers a human touch that resonates with many clients, especially those who value face-to-face interactions and personalized service. Agents leverage their knowledge, expertise, and interpersonal skills to establish rapport with clients, address their concerns, and offer peace of mind knowing that their insurance needs are being handled by a trusted advisor.

Furthermore, the agency distribution channel benefits from the ability of agents to adapt and respond to changing market dynamics, consumer preferences, and regulatory requirements. Agents undergo continuous training and professional development to stay abreast of industry trends, product innovations, and best practices, enabling them to deliver value-added services and solutions that meet evolving client needs.

North America is leading in both the life insurance and non-life insurance markets due to its mature insurance industry, robust regulatory framework, high levels of insurance penetration, and extensive distribution networks.

North America's dominance in both the life insurance and non-life insurance markets can be attributed to several key factors that collectively contribute to its leading position. Firstly, the region boasts a mature insurance industry with a long history of development and innovation. Insurance companies in North America have established strong brand reputations, financial stability, and expertise in underwriting diverse risks, making them trusted partners for individuals, businesses, and institutions seeking insurance coverage. Moreover, North America benefits from a robust regulatory framework that promotes consumer protection, market stability, and fair competition within the insurance sector.

Regulatory bodies such as the National Association of Insurance Commissioners (NAIC) in the United States and the Office of the Superintendent of Financial Institutions (OSFI) in Canada set stringent standards for solvency, capital adequacy, and disclosure, ensuring the soundness and integrity of the insurance market. North America exhibits high levels of insurance penetration, with a significant portion of the population and businesses covered by various insurance products. Factors driving insurance penetration include widespread awareness of insurance benefits, a culture of risk management and financial planning, and favorable tax treatment of insurance premiums and benefits.

As a result, insurance companies in North America enjoy a large and diverse customer base, providing ample opportunities for growth and expansion. Furthermore, North America's insurance market is characterized by extensive distribution networks encompassing multiple channels such as independent agents, brokers, bancassurance, direct sales, and online platforms. This diverse distribution landscape ensures broad market reach, accessibility, and convenience for consumers seeking insurance products and services.

Another contributing factor to North America's leadership in the insurance market is its strong economy and stable political environment, which provide a conducive business environment for insurers to operate and thrive. The region's robust infrastructure, technological advancements, and innovation ecosystem further support the growth and competitiveness of the insurance industry. That enables insurers to leverage emerging technologies, data analytics, and digital platforms to enhance customer experiences and streamline operations.

• In August 2023, IndiaFirst, a life insurance company, introduced the Guarantee of Life Dreams (G.O.L.D.) Plan, a non-linked and non-participating insurance product. This plan provides policyholders with consistent long-term income. Policyholders can choose premium payment terms of 6, 8, or 10 years for policy durations of 30 and 40 years.
• In 2023, Quality Espresso, a company in the professional espresso coffee machine industry, introduced the new Q PRESS automatic tamper to the market. This accessory is designed for use with high-quality professional grinders.
• In 2023, Radik Labs began selling its leading handheld auto tamper, the BOSeTamper, in retail stores. This tamper features a 58.5-millimeter diameter flat steel tamping surface. The wireless, battery-powered auto-tamper applies between 25 and 30 pounds of downward pressure, reaching a maximum depth of approximately 20 millimeters into a portafilter basket.
• In June 2022, UnitedHealthcare announced the plans of acquiring EMIS Group. The EMIS Group is a leading health technology company based in the UK. The deal is expected to be an all-cash deal of GBP 1.24 billion (USD 1.5 billion).
• In February 2022, Allianz SE one of the leading insurance company globally announced that is entering into a Share Purchase Agreement (SPA), to acquire 72% of European Reliance General Insurance Company SA ('European Reliance'). European Reliance is one of the leader in the Greek insurance sector with a network of 5,667 agents and 110 retail offices.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Life and Non-Life Insurance market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Insurance Type:

• Life
• Non-life
• Health
• Home
• Motor
• Travel
• Business
• Others

By Distribution Channel:

• Direct
• Agency
• Direct & online
• Other

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the analysts made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once the analysts acquired primary data, they started verifying the details obtained from secondary sources.

Intended audience:

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Life and non-life insurance industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.