After falling consistently between 2010-1013, there has been a slight increase in the Indian insurance penetration at 3.44 per cent in 2015 and 3.49 per cent in 2016.According to the insurance regulator IRDAI, during the year 2016, the insurance density was USD 59.7 (USD 54.7 in 2015).The level of insurance density reached the maximum of USD 64.4 in the year 2010 from the level of USD 11.5 in 2001.


During the first decade of insurance sector liberalisation, the sector had reported consistent increase in insurance penetration from 2.71 percent in 2001 to 5.20 percent in 2009. Since then the level of penetration was declining till 2014.


The insurance density of life insurance sector had gone up from USD 9.1 in 2001 to reach the peak at USD 55.7 in 2010. Since then it has exhibited a declining trend upto the year 2013. During the year 2016, the level of life insurance density was USD 46.5 (USD 44 in 2014 and USD 43.2 in 2015).The life insurance penetration had gone up from 2.15 percent in 2001 to 4.60 percent in 2009.Since then, it has exhibited a declining trend upto the year 2014.There was a slight increase in life insurance penetration during 2015 reaching 2.72 percent and has remained unchanged in 2016.


Over the last 10 years, the penetration of non-life insurance sector in the country remained steady in the range of 0.5-0.8 percent, said IRDAI annual report. The sector's density has gone up from USD 2.4 in 2001 to USD 13.2 in 2016.However, the annual report of General Insurance Council, the official body of all the general insurers and reinsurers, estimate the general insurance penetration at 0.84 per cent in 2015-16.


The measure of insurance penetration and density reflects the level of development of insurance sector in a country.While insurance penetration is measured as the percentage of insurance premium to GDP, insurance density is calculated as the ratio of premium to population (per capita premium).