NRI Insurance Customer Base Expands By 50%, Growth In UAE, US, And Saudi Arabia: Policybazaar

The landscape of insurance purchases by Non-Resident Indians (NRIs) has seen remarkable expansion, with a significant increase in the customer base across various insurance products like Term, Health, and Investment-linked plans, according to a study done by Policybazaar. This growth is notably led by NRIs residing in the UAE, the US, and Saudi Arabia.

The allure of India's competitive premiums, coupled with enhanced digital platforms, has made it simpler for NRIs to procure insurance policies remotely, ensuring financial security for their families back in India.

In the domain of Term Insurance, the reach has broadened impressively, with NRIs now constituting 12% of the total customer base. This segment has witnessed over 50% compounded annual growth in the past two financial years. The COVID-19 pandemic played a critical role in this surge, highlighting the importance of financial protection and encouraging many NRIs to reassess their life insurance requirements. The age group of 31-40 years, representing individuals in their prime earning years with dependents, accounts for 61% of buyers. Interestingly, female policyholders have seen an increase from 4% to 11%, indicating a growing recognition of financial independence among women.

Demographic Insights and Regional Preferences

From a demographic perspective, the spike in female NRI policyholders to 11% from a mere 4% underscores a shift towards financial autonomy and the significance of securing one's family's financial future. The majority of these insurance buyers are situated in affluent regions, with the top regions being the UAE, US, and Saudi Arabia, highlighting a preference for higher sum assured in countries with elevated living standards. The average sum assured varies by region, with the highest being in the US at approximately ₹2.5 crore, reflecting both the higher financial needs and income levels of NRIs there.

Health Insurance Trends Among NRIs

Moving onto Health Insurance, the sector has seen exponential growth with a 70% increase in FY 2022-23, doubling in the subsequent years. A considerable portion of this demand stems from NRIs frequently visiting India or having elderly dependents residing there. The adoption of OPD coverage and global coverage plans has risen, indicating a preference for comprehensive care that accommodates the mobile lifestyle of NRIs and their families. Additionally, an impressive 40-45% of NRI customers are leveraging GST refunds on health insurance premiums, showcasing a heightened level of financial literacy in this segment.

The NRI investment in insurance-linked products, particularly Unit-Linked Insurance Plans (ULIPs), has also surged by 50% between 2021 and 2024, with NRIs now making up 12.5% of the total customer base. This growth is driven by the dual benefits of investment and protection offered by ULIPs, alongside the appealing returns from India's equity markets. The majority of these investors fall within the 28-45 age group, indicating a trend of early financial planning among NRIs. Female participation in this investment category is on the rise too, with 11% of investors being women in FY 2025, up from 6% the previous year.

The regional distribution of NRI investments points towards a significant concentration in the UAE, the USA/Canada, and Saudi Arabia. This is reflective of the large expatriate populations in these regions and their growing interest in the stable and lucrative investment environment in India. ULIPs, in particular, remain the preferred choice for 92% of NRI investors, attributed to their growth-oriented nature and the potential for higher returns in the buoyant post-pandemic Indian equity market.

In summary, the NRI segment's engagement with the Indian insurance market has grown substantially across Term, Health, and Investment-linked products. The digitalization of the purchasing process, coupled with India's competitive insurance premiums, has made it increasingly convenient for NRIs to invest in financial security for their families. This trend is further evidenced by the demographic shifts, with a notable increase in female policyholders and younger NRIs engaging in financial planning from an early age. The leading regions for these investments, including the UAE, US, and Saudi Arabia, highlight the global nature of this expanding customer base.