India is expected to emerge as the third-largest market for life insurance in the world by 2015, only behind China and Japan, according to a research report by BRICdata. India currently ranks twelfth among the top markets for life insurance.

The market size of the life insurance industry in India is expected to increase to USD111.9 billion in 2015 from USD66.5 billion in 2011, recording a CAGR of 14.1%. In terms of the policies sold, the numbers are expected to increase to 85.21 million in 2015 from 53.23 million in 2010, as per BRICdata.

The report lists population growth, robust economy, attractive tax benefits, rising disposable income among India’s burgeoning middle class and increased awareness about insurance benefits as the key drivers in this market.

The Insurance Regulatory Development Authority’s proposal to increase the limit on foreign direct investment from the present 26% to 49% and improved efficiency of distribution channels in smaller cities are also among the other factors influencing growth.

The individual life insurance segment, which comprised 74.8% of the total Indian life insurance industry in 2010, is expected to grow to 79.3% in 2015 on increased investment in individual life insurance products such as term and pension plans.

The unit-linked insurance plans (ULIPs) are expected to be fastest growing product category at CAGR of 21.2% during the forecast period.

According to the report, unit-linked pension and annuity products will offer a minimum guaranteed return of 4.5% per annum on maturity.

The full report ‘Life Insurance in India, Key Trends and Opportunities to 2015’ is available from BRICdata. Click here for more details.