New Delhi, Sept. 24: Insurers in India are badly crimped for business—but they are never short on hope.
The numbers are really stacked against the insurance industry players: India accounts for a meagre 0.41 per cent of the global insurance market with a per capita insurance premium of only $ 8.
Secondly, just 77 million of the country’s over 1 billion population have a life insurance cover. But the good news is that the insurers realise that they are still scratching the surface of an immense business opportunity.
A Ficci survey shows that the insurance companies—12 life insurers and 6 general insurance outfits—are projecting a healthy 10 per cent growth next year.
Approximately 35 per cent of the respondents feel that the Indian insurance market is big enough to accommodate 30 more players including the existing ones.
Ten years down the line, the respondents expect to have a more competitive environment, more intermediaries with the emergence of several medium-sized companies having a regional focus, greater insurance penetration in rural areas, emergence of bancassurance as an important channel of distribution, change in market strategies, and see pensions and reinsurance emerging as promising growth areas.
The survey tried to analyse changes in the insurance sector over the past two years. It mainly focused on aspects like market size expansion, new products being introduced in the post-liberalisation era, agency network, bancassurance, rural insurance and health insurance.
Approximately 82 per cent of the respondents felt that products were launched by life insurance companies, whereas only 18 per cent felt new products were added in the non-life sector.
Also, 84 per cent of the respondents were of the view that following the entry of private players there has been a marked improvement in customer servicing. Around 56 per cent felt the improvement was really significant. About 74 per cent of the respondents said they were using advertisements as a mode of spreading consumer awareness.
The survey went on to say that since agents form the backbone of insurance companies, components like trust and personal service are of prime importance. About 79 per cent respondents including life insurance companies and consultants felt that a large network of agents was highly important.
Moreover, 53 per cent of the respondents felt that the market was sufficiently developed for bancassurance, while 47 per cent felt it was not.
It is important to note that in developed markets like the UK and the US, banks account for almost 19 per cent and 20 per cent respectively for total sales of insurance products.