Insurance industry is expected to reach US$ 350-400 billion in premium income by 2020, making India amongst top 3 life insurance markets and top 15 non-life insurance markets, says FICCI-BCG Report

A Federation of Indian Chamber of Commerce and Industry (FICCI) and the Boston Consulting Group (BCG) report titled ‘India Insurance – Turning 10, Going on 20’ reveals that the insurance industry will continue to outpace the rapid economic growth to reach US$ 350–400 billion in premium income by 2020, making India amongst the top three life insurance markets and top 15 non–life insurance markets by 2020.

The report states that the total penetration of insurance (premium as percentage of GDP) has increased from 2.3 percent in 2001 to 5.2 percent in 2011. In addition there has been a vast increase in the coverage of insurance. The number of life policies in force has increased nearly 12–fold over the past decade and health insurance, nearly 25–fold. This progress has been aided by the dramatic shift in the availability of products, for example: better term, ULIPs, whole life, maximum NAV guarantee, auto assistance, auto pay per km insurance, disease management, wellness, etc.



“The report highlights the importance of insurance in India’s economy, the progress made in the last decade, key challenges associated with the sector and an action agenda for insurance companies and the Government”, said Sandeep Bakhshi, Chairman, FICCI’s Insurance and Pensions Committee and Managing Director & CEO, ICICI Prudential Life Insurance Co Ltd. Progress has been made on the channel front with the emergence of five distinct channels — bancassurance, broking, corporate agency, direct and auto dealers to complement the existing third party agency and in–house salaried sales force. Along with the emergence of multiple channels, the distribution reach has increased manifold, nearly 6–fold for life, and 1.5 times for non–life. During the same time, the Indian market has evolved from a monopoly to a truly competitive market.



According to Dr. Rajiv Kumar, Director General, FICCI, “The report estimates the total insurance premium at approximately INR 17 lakh crores to INR 22 lakh crores in 2020 (with life being INR 15 lakh crores to INR 20 lakh crores). This massive growth will have a significant impact on India’s ranking in the global insurance industry and is based on strong fundamentals.”

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