India’s insurance sector has been growing dynamically in the last couple of years. Despite the suite of reforms that have been implemented to stoke the sector’s growth, it still has a long way to go, as its share in the global insurance market remains abysmally low. In this paper, we analyse the Indian insurance sector and trace its evolution and growth. We also identify the key challenges facing the sector. As underlined in the paper, low penetration and density rates, less investment in insurance products, the dominant position of public sector insurers, and their deteriorating financial health are some of the challenges facing the sector. Since India’s economic growth depends on how shock-absorbent India’s economy is, addressing these challenges assumes importance for developing a sound insurance sector.