Strong Economic Fundamentals: Looking at GDP growth forecasts, India is likely to figure amongst the faster growing economies from around the world. This is a healthy indicator for insurance sector when studied in conjunction with YoY growing savings rate and %financial savings/ total savings.
2. Growth Drivers
a. Strong Economic Fundamentals: Looking at GDP growth forecasts, India is
likely to figure amongst the faster growing economies from around the world.
This is a healthy indicator for insurance sector when studied in conjunction
with YoY growing savings rate and %financial savings/ total savings.
3. Growth Drivers
b. Increased consumer awareness and demand: The working population (25–
60 years) is expected to increase from 675.8 million in 2006 to 795.5 million in
2026. Increased incomes are expected to result in large disposable incomes,
which can help drive growth for the sector if desired consumer pull can be
created. E.g. The growing affluence of the Indian middle-class accompanied
with lifestyle-related diseases, inflationary healthcare costs combined with
increased awareness generated through specific IRDA measures and insurers’
communication, are driving the demand for health insurance in India
4. Growth Drivers
c. Organic Headroom to Grow: There is a lot of untapped market in the country.
This gives space for all players to grow and expand the insurance industry.
Increased investments will allow for stronger distribution and corresponding
expansion in the underpenetrated segments of the population, like those in
smaller towns and non-urban areas.
In the recent past, the industry has witnessed the emergence of alternate
distribution channels. The typical distribution channels used by insurance
companies now include bancassurance, direct selling agents, brokers, online
distribution, corporate agents , tie-ups of para-banking companies with local
corporate agencies (for example NGOs) in remote areas.
5. Growth Drivers
Further, technology has emerged as a big enabler among global evidence that
internet penetration and usage have a positive correlation with the
performance and activities of insurance companies at various levels – lower
customer acquisition costs, improved access to information, product
innovation that cater to the needs of the customers and enhanced
convenience. It is estimated that digitization will reduce 15-20 per cent of
total cost for life insurance and 20-30 per cent for non-life insurance. While
the current size is marginal as compared to overall customer base and
underwritten premium, the segment shall witness growth and reach a
significant size in the future as the internet penetration increases and
awareness of the customers also rises
6. Growth Drivers
d. Growing Investment in Product Design and Delivery: Globally, product
innovation has proved to be critical for insurers to succeed in mature markets.
As per a report in Economic Times dated Dec’15, insurers are investing
significantly in improved product manufacturing capabilities globally,
including building product life cycle management strategies and considering
the product needs of future demo-graphic segments.
With customers asking for increased levels of customization, product
innovation is one of the best strategies for companies to increase their
market share. In India, however, the innovation has been limited to minor
modifications on tariffs and features, add-on covers such as dental cover, daily
cash benefits for hospitalization and the like. The sector will need to cover the
bridge by introducing differentiated and multi-tiered long- term products. The
journey has begun with players investing time and thought on innovations
around product and delivery.
7. Growth Drivers
e. Conducive Policy and Regulatory Environment : With slew of recent reforms
like FDI relaxation, Insurance Bill, tax incentives, clarity on IPOs etc., there is
enough potential for positive growth of the Indian insurance industry given
the focused, synergistic efforts of the regulator, government and industry
players in the backdrop of rising demand for insurance.
8. THANK YOU
Email: jyoti.gadia@resurgentindia.com Call Us: +91 124 4754550
www.resurgentindia.com
Read full report on: http://blog.resurgentindia.com/indian-insurance-industry-reaching-
out-to-exponential-growth/