Indian Insurance Sector likely to be Rs 2000 billion size By 2011
Estimating the potential of the Indian insurance market from the perspective of macro-economic variables such as the ratio of premium to GDP, ASSOCHAM says India’s life insurance premium, as a percentage of GDP is 1.8% against 5.2% in the US, 6.5% in the UK or 8% in South Korea.
ASSOCHAM findings further reveal that in the coming years, the corporate segment, as a whole will not be a big growth area for insurance companies. This is because penetration is already good and companies receive good services. In both volumes and profitability, therefore, the scope for expansion is modest.
The Chamber has suggested that insurer’s strategy should be to stimulate demand in areas that are currently not served at all. Insurance companies mostly focus on manufacturing sector, though, the services sector is taking a large and growing share of India’s GDP. This offers immense opportunities for expansion opportunities.
To understand the prospects for insurance companies in rural India, it is very important to understand the requirements of India's villagers, their daily lives, their peculiar needs and their occupational structures. There are farmers, craftsmen, milkmen, weavers, casual labourers, construction workers and shopkeepers and so on.
The rural market offers tremendous growth opportunities for insurance companies and therefore, should develop viable and cost-effective distribution channels to create consumer awareness and instill confidence. The ASSOCHAM found that there are 124 million rural households. Nearly 20% of all farmers in rural India own a Kissan Credit cards. The 25 million credit cards used till date offer a huge data base and opportunity for insurance companies. An extensive rural agent network for sale of insurance products could be established. The agent can play a major role in creating awareness, motivating purchase and rendering insurance services.
(Source: Assocham Press Release dated May 13, 2009)
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