Indian Insurance Sector likely to be Rs 2000 billion size By 2011
An unprecedented growth of over 200% is likely to be seen in Indian insurance business by 2010-11 in which private insurance business would grow @ 140% in view of aggressive marketing technique adopted by them as against 35-40% of state owned insurance companies growth rate, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The Chamber expects the total insurance business reaching a level of Rs.2000 billion in next 2 years from current level of Rs. 500 billion. The aforesaid findings are made by the ASSOCHAM on `Insurance Sector Futuristic Growth’, pointing out that in the last couple of years, the insurance sector has grown by CAGR of around 175% and the trend will emerge still better because of potential factor.
The Chamber President, Mr. Sajjan Jindal said, “on account of intense marketing strategies adopted by private insurance players, the market share of state owned insurance companies like GIC, LIC and others have already come down to 70% in last 4-5 years from over 97% and more intense competition is likely to be witnessed in the near future”.
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 (RoR) to their subscribers and policy holders is estimated at about 35% as against 20% of domestic insurance companies. This factor is mainly responsible for hike in private insurance market and might grow further exceeding even 140%.
Secondly, the state owned insurance companies have limited number of policies to offer to their subscribers while in case of private insurance companies, their policy numbers are many more and the premium amount as well as the maturity period is much competitive as against those of government insurance companies.
Interestingly, said Mr. Jindal, the private sector insurance players have started exploring the rural markets in which until recently the state owned companies had the monopoly.
The Chamber has projected that in rural markets, the share of private insurance players would increase substantially as these have been able to generate a faith among their rural consumers.
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