By IANS,
New Delhi : India’s insurance business will reach a level of Rs.20 billion in the next two years from the current level of Rs.500 billion, according to an industry lobby.
“A growth of over 200 percent is likely to be seen in Indian insurance business by 2009-10 in which private insurance business would grow at 140 percent in view of aggressive marketing techniques,” said a report by the Associated Chambers of Commerce and Industry of India (Assocham).
“The state-owned insurance companies’ growth rate will be 35-40 percent,” the study said.
According to Assocham, in the last couple of years, the insurance sector had grown by 175 percent and the trend will emerge still better because of huge potential.
“On account of intense marketing strategies adopted by private insurance players, the market share of state-owned insurance companies like GIC (General Insurance Corp), LIC (Life Insurance Corp) and others have already come down to 70 percent in last four-five years from over 97 percent, and more intense competition is likely to be witnessed in the near future,” Assocham president Sajjan Jindal said.
“The private insurance players’ entry into insurance sector is still restricted since India has yet to open it up liberally. But even then, their rate of return to their subscribers and policy holders is estimated at about 35 percent against 20 percent of domestic insurance companies,” Jindal added.
Moreover, the state-run companies have limited number of policies to offer to their subscribers while the private players offer many more policies with premium amount and maturity period, he added.
Interestingly, the private sector insurance players have started exploring the rural markets in which until recently the state-run companies had the monopoly.
The chamber has projected that in rural markets, the share of private insurance players would increase substantially.
At present, India’s life insurance premium, as a percentage of GDP, was 1.8 percent against 5.2 percent in the US, 6.5 percent in Britain and eight percent in South Korea.