Chennai, Jan. 29 -- The low insurance penetration in India is largely due to the high cost of acquisition or high distribution cost of insurers resulting in inflated protection cost and limiting the sector's reach, states the Economic Survey 2025-26.
According to the Survey, the Indian insurance sector stands at a pivotal juncture.
While it has matured into one of the economy's deepest institutional pools of long-term capital, it remains constrained by a 'low-penetration, high-cost' equilibrium driven by a high-cost distribution model that has inflated the cost of protection, structurally limiting the sector's reach despite its robust solvency and balance sheet strength.
The path forward necessitates decisive shifts. Insurers must priori...