INSUBCONTINENT EXCLUSIVE:
By DK AggarwalThe Indian insurance market is a huge business opportunity waiting to be harnessed
The size of the life insurance industry was Rs 4.2 lakh crore on a total-premium basis as of FY2017, while the size of the non-life
insurance sector was Rs 1.28 lakh crore
On the life insurance front, total premium has grown at a stupendous 17 per cent CAGR between FY2001 and FY2017, after the entry of private
players was allowed in 2000
New business premium grew at 9 per cent CAGR between FY2007 to FY2017 to Rs 1.8 lakh crore.
As per CRISIL, the total premium is expected to
grow at 13-15 per cent CAGR over the next five years from Rs 4.18 lakh crore in FY2017 to Rs 7.90 - Rs 8.10 lakh crore by FY2022
Gross direct premium income (GDPI) for non-life insurers is projected to grow at 15-20 per cent CAGR between FY2017 and FY2022.
Undoubtedly,
management, operating models, investment or the distribution channels.
The government initiative of Pradhan Mantri Fasal Bima Yojana (PMFBY)
has covered 50.9 million farmers in India in 2016-17
Also, the government policy of insuring the uninsured has gradually pushed insurance penetration in the country.
The government has also
It has the benefit cover of Rs 5 lakh per family per year
The government is actively motivating digitisation by giving direct benefit transfers and other initiatives under the Digital India
programme.
Calendar 2017 turned out to be a landmark year for the insurance sector, which has seen major insurers get listed on the bourses
while a few more are in the pipeline
Undoubtedly, listing has brought in compliance and will continue to improve service levels of insurance companies.
Moreover, the Insurance
Regulatory and Development Authority of India (IRDAI) has allowed private equity investors to become promoters in unlisted insurance
companies, which may enhance PE investments in the sector
The future of the sector looks promising with several changes in regulatory framework, which will continue to bring in further change in
the way the industry does its business
With a large population and an untapped market, insurance happens to be a very big opportunity for insurance companies to grow, driven by
rapid adoption of digital technologies.
Technology-led disruptive ideas are changing the face of the business
A balanced product mix, diversified distribution network and customer-centric approach have helped deliver profitable growth by insurance
Moreover, the outlook for insurance has changed from a mere savings/investment to a protection product as well, which will continue to
The dominance of players having strong bancassurance channels will continue to grow
Factors such as increasing life expectancy, favourable growth in financial savings and greater employment in private sector will continue to
fuel demand for pension plans.
Also, strong growth expected in the automotive industry over the next decade would be a key driver for the
Companies such as GIC, HDFC Standard Life, ICICI Lombard, ICICI Prudential Life, New India Assurance Company and SBI Life are expected to
see good growth going forward
Investors may add insurance stocks to their kitty for long-term wealth creation.
