New Delhi, Oct. 1 -- At a time when India's insurance regulator is reviewing the economics of insurance distribution, a McKinsey report has found that insurance penetration remains low even as operating expenses at life insurers have grown faster than new business premiums.

India's overall insurance penetration stood at 3.7 per cent of GDP in FY25, nearly half the global average of 7.3 per cent, according to the report. The shortfall is largely in non-life insurance, where penetration stands at just 1 per cent of GDP, while life insurance penetration is 2.7 per cent.

The findings come amid an ongoing debate over insurance distribution costs and commissions, with the Insurance Regulatory and Development Authority of India (IRDAI) examini...