Effective insurance coverage in India could double from 15% to 30% in five years: IRDAI Chairman

Mumbai: Only about 15 per cent of India's population and businesses are estimated to have effective insurance coverage, a figure that could double to 30 per cent over the next five years, Insurance Regulatory and Development Authority of India (IRDAI) Chairman Ajay Seth said on Thursday, highlighting the large protection gap in the country.

Speaking at the SamvAAd 2026 India Open Finance Summit in Mumbai, Seth said expanding digital insurance services and making them more affordable could help bring more people and businesses under insurance coverage.

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"At the most, 15 per cent of our population and economic enterprises would have an effective cover," Seth said during a discussion with financial educator and author Monika Halan.

"Can we make that fifteen to reach at least thirty per cent? Double that number with an effective cover. That perhaps is possible in five years," he added.

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However, Seth clarified that the existing coverage figure was based on his best estimate, as the industry currently tracks the number of policies sold and premiums collected rather than the actual number of people and businesses adequately insured.

"Currently, we track the number of policies, how much premium is collected every year. We really do not track the number of lives covered or the total sum insured," he said.

The remarks highlight a key challenge for India's insurance industry, where growth in premium collections and policy sales does not necessarily mean that more people have adequate financial protection.

Seth said digital infrastructure, particularly the Account Aggregator (AA) framework, could play an important role in expanding insurance access by helping insurers use financial information with customer consent and reduce the cost of providing services.

He noted that the industry must develop insurance products and services around the needs of individuals and small businesses rather than focusing only on building digital infrastructure.

Referring to the success of the Unified Payments Interface (UPI), Seth said the insurance sector needed to create similar demand for digital services.

He also stressed that insurance agents and intermediaries would continue to play an important advisory role, particularly for customers requiring assistance in choosing suitable products.

However, digital platforms would be essential for expanding insurance services beyond higher-income groups and reaching customers in smaller cities.

"Digital is the way to move forward," Seth said, adding that account aggregator infrastructure could make the cost of providing insurance services far more affordable.

The regulator's emphasis on effective coverage signals a shift towards measuring how many individuals and businesses are financially protected, rather than judging the industry's progress only by policies sold and premiums collected.