"The insurance industry will continue to outpace the rapid economic growth to reach USD 350-400 billion in premium income by 2020 (approximately Rs 17-22 lakh crore), making India amongst the top three life insurance markets and top 15 non-life insurance markets by 2020," the report by Federation of Indian Chamber of Commerce and Industry (FICCI) and the Boston Consulting Group ( BCG) has said
The total penetration of insurance (premium as percentage of GDP) has increased to 5.2 per cent in 2011 from 2.3 per cent in 2001, said the report titled 'India Insurance - Turning 10, Going on 20'.
In addition, there has been a surge in insurance coverage due to availability of more products like better term plan, ULIPs, whole life, maximum NAV guarantee, auto assistance, disease management and wellness, it said.
The number of life policies had increased nearly 12- fold over the past decade and health insurance nearly 25-fold.
Progress has been made with emergence of multiple channels like bancassurance, broking, corporate agency, direct and auto dealers to complement the existing third party agency and in-house salaried sales force, ICICI Prudential Life Insurance Managing Director and CEO Sandeep Bakhshi said.
Along with the emergence of multiple channels, the distribution reach has also gone up, nearly 6-fold for life, and 1.5 times for non-life, evolving the Indian market from a monopoly to a competitive one, he said.
Said Rajiv Kumar, director general,Ficci, "The report estimates the total insurance premium at approximately Rs17 lakh crore to Rs 22 lakh crore in 2020(with life being Rs 15 lakh crore to Rs 20lakh crore). This massive growth will have a significant impact on India's ranking in the global insurance industry and is based on strong fundamentals."
"While the industry has come a long way over the past decade, the big c h a l l e n g e w i t h t h e i n d u s t r y i s profitability. Private life insurers have accumulated losses of over Rs 16,000crore till March 2010. Similarly, the nonlife
industry has cumulative under -writing losses of nearly Rs 30,000 crore,"said Alpesh Shah, partner & director,BCG India and author of the report.The report highlights the importance ofIninsurancein India's economy, the progress made in the last decade, key challenges associated with the sector and an action agenda for insurance companies and the government," said Sandeep Bakhshi, chairman, Ficci's insurance and pensions committee and managing director & CEO, ICICI Prudential Life Insurance Co Ltd.Progress has been made on the channel front with the emergence of five distinct channels — bancassurance,broking, corporate agency, direct and auto dealers to complement the existing third-party agency and in-house salariedsales force.
"Along with the emergence ofmultiple channels, the distribution reach has increased manifold, nearly 6-fold for life, and 1.5 times for non -life. During the same time, the Indian market has evolved from a monopoly to a truly competitive market," the study said.
