General Insurance Premium may grow at CAGR of 20% in next 6 year & exceed Rs.1 Lakh Cr. By 2015
February 8, 2009 -
Amount from General Insurance premium is likely to grow at CAGR of 20% in next 6 year to reach over Rs.1 lakh crore by 2015 from current size of Rs.28,000 crore since increasing insurance awareness in masses will create huge opportunities to widen insurance base in rural and urban pockets, reveals a joint Paper of United India Insurance Co. and The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
In a United India Insurance and ASSOCHAM Paper titled Indian Insurance : Way Forward further reveals that gross premium of general insurance grew at CAGR of 16.6% from 2000-01 to 2007-08. In 2000-01, gross premiums of general insurance was at meager Rs.9620 crore which touched Rs.28,138 crore by 2007-08 with general insurance penetration @ 0.60% of GDP.
Releasing its findings, the ASSOCHAM President, Mr. Sajjan Jindal said, “huge market largely remained untapped both in rural and urban India as 70% of population is not touched by the insurance. High growth in automobile sector, huge strives in healthcare will also open up health insurance potentials substantially”.
The paper says that size of general insurance industry and insurance penetration in economies of scale is much larger as compared to India and even China. The general insurance size in United States is currently US$ 488 billion as compared to US$ 10.5 billion of Switzerland, US$ 74 billion of France, US$ 77 of Germany, US$ 70 billion of Japan, US$ 14.2 billion of Brazil, USS$ 14.1 billion of Russia, US$ 2.6 billion of Thailand, US$ 26.3 billion of China. In India, its size as per latest estimates is US$ 6.2 billion.
As far as the penetration level of general insurance in India is concerned, it is 0.60% of its GDP against the world average of 2.14%. In United States, it is 3.94% of its GDP. While in Switzerland, France, Germany, Japan, Brazil, Russia, Thailand and China, the percentage of penetration is respectively 2.4%, 2.34%, 1.99%, 1.46%, 1.10%, 1.10%, 1.08%, 0.81% of their GDP.
India’s ranking based on penetration levels world over is 136 as compared to 106 of China, 87 of Thailand, 86 of Russia, 85 of Brazil, 61 of Japan, 36 of Germany, 25 of France, 20 of Switzerland and 9 of United States of America.
The reason as to why great potential of general insurance premium lies ahead in India is because of its rural sector in which large number of micro financing institutions will explore possibilities for wider coverage of general insurance. Secondly, the government initiatives on mass insurance will also gradually widen to cover large parts of countryside for general insurance including India’s urban pockets.
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