Outlook of Indian Insurance Industry
Content
Overview of Indian insurance industry 2013
1
Outlook of Indian Insurance Industry lEafCraft Insights
Overview of Indian insurance industry 2013
INDEX Introduction.......................................................................................................................................3 Brief history.......................................................................................................................................4 Market share of different insurance companies for the financial year 2012...............................5 Status of the Indian insurance industry and its demographics.................................................... 6 Changing market dynamics: evolution of mindset of the Indian population.............................. 7 Marketing strategies for various companies...................................................................................8 The way ahead..................................................................................................................................10
2
lEafCraft Insights
Overview of Indian insurance industry 2013
INTRODUCTION Life is synonym to uncertainty and has become prone to contingency at any point of time. Any injury or accident can happen to anyone of us or our loved ones at any point of time. The material value of our life or immortal possessions of ours cannot be correctly estimated but of course we can keep a backup in case something fatal happens to them. This very function is served by insurance that provides us with a mental and financial security and makes our life easier in case some contingency happens. In short insurance is that extra security that helps to pay or replace a thing or even receive regular payments in case something unfavourable happens to our life or property without having to take the extra pain to arrange for funds after the casualty. Insurance in today‟s scenario serves the dual purpose of savings and security. It is particularly important now days because of the increased quantum of unpredictability and proneness or susceptibility to chronic infections and diseases on account of changing lifestyle, pollution, etc. The need to insure one‟s property arises because of the crime rate which is almost occupying every strata of the society. It is the call of the hour to provide oneself with an additional umbrella of protection because of the multiple benefits of insurance like: planning for later life stages, protection against rising health expenses, risk cover, safe and profitable long term investment, thrift or regular savings in an individual, tax benefits, assured income through annuities, facilities of loan without affecting the policy benefits, diverse and wide variety of insurance policies designed to cater the needs of everyone, mental security the value of which cannot be estimated, to take care of one‟s loved ones in case of his / her absence, etc. The benefits of insurance are innumerable which should keep anyone now in double mind whether they should insure themselves or not. The various types of insurance are: life insurance, health insurance, vehicle insurance, agricultural insurance, business insurance, unemployment insurance, marine insurance, casualty insurance, payment protection insurance, liability insurance, property insurance, child insurance, etc. The customised, innovative and novel products and services provided by different players in the industry further increases the growth and attractiveness of the industry.
3
lEafCraft Insights
Overview of Indian insurance industry 2013
BRIEF HISTORY The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. The Triton Insurance Company Ltd formed in 1850 and was the first of its kind in the general insurance sector in India. Established in 1907, Indian Mercantile Insurance Limited was the first company to handle all forms of Indian insurance. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912. The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets. Sector Reform in Indian insurance was initiated by the formation of the Malhotra Committee in1993. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India. The Malhotra Committee attempted to improve various aspects of the insurance sector, making them more appropriate and effective for the Indian market. The recommendations of the committee put stress on offering operational autonomy to the insurance service providers and also suggested forming an independent regulatory body. The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in 2000.The goals of the IRDA were to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc.
In India license raj was reduced and reduced tariffs and interest rates ended many public monopolies, allowing automatic approval of foreign direct investment in insurance sector. India has progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalisation.
4
lEafCraft Insights
Overview of Indian insurance industry 2013
MARKET SHARE OF DIFFERENT INSURANCE COMPANIES IN INDIA FOR THE FINANCIAL YEAR 2012
5
lEafCraft Insights
Overview of Indian insurance industry 2013
STATUS OF THE INDIAN INSURANCE INDUSTRY AND ITS DEMOGRAPHICS Indian insurance industry is a flourishing industry with several national and international players competing and growing at rapid rates. All this can be attributed to the reforms leading to the relaxation of the policy regulations that ignited the growth of the Indian insurance industry. The level of awareness and consciousness has risen among people for the need to insure them and elevation in the levels of literacy, population and urbanisation has added fuel to the fire leading to ever growing demand of the insurance products. The period from 2010-2015 has been regarded as the “GOLDEN AGE” for the Indian insurance industry probably because of the future prosperous growth predictions of the industry. The LIFE INSURANCE CORPORATION OF INDIA dominated the industry till 1990s after which few private players started entering the market. The annual growth rate of the Indian insurance industry varies between 15% - 20%. The entry of the private players in the industry around 2000-2001 initiated the growth of the industry. A study conducted by the Federation of Indian chamber of commerce and industry and the US based Boston Consulting Group reveals that the awareness and total penetration of insurance services [premiums as % of GDP] in India has increased from 2.3% in 2001 to 5.2% in 2011. The report further provided information that the number of life insurance policies in the year 2011 was 12 times more than the last decade and number of people taking the health insurance has risen 25 times. India is a US $41billion industry. Currently, in India only two million people {.2% of the total population of 1 billion} are covered under Mediclaim whereas in developed nations like USA about 75% of the total population are covered under some insurance scheme. As far as the conventional plan of life insurance policies are concerned, there is a growth of 11% in policies and 22% in premium according to the Minister of State for Finance. The Indian health insurance market accounted for 3.2 per cent of the overall insurance industry in the fiscal year 2011-2012. Key factors driving the growth of the health insurance sector were rising healthcare expenditure, increasing disposable income and the rise in the number of people with affluent lifestyles. Though the health insurance market is currently dominated by public-sector companies, the top six private health insurance companies increased their cumulative market share from 17.2 per cent to 29.1 per cent during 2007 to 2011. Keeping all these things in mind targeting and positioning of the products can be done accordingly in areas where demand can be created and penetration is low.
6
lEafCraft Insights
Overview of Indian insurance industry 2013
CHANGING MARKET DYNAMICS: EVOLUTION OF MINDSET OF THE INDIAN POPULATION There has been a radical change in the mindset of people in the last 10- 15 years regarding the insurance policies and its use. People earlier used to take this just as a means of protection but now people try to grab the multiple benefits which the products promise to provide ranging from security to investments to tax benefits to additional income and what not. The reason can be attributed to the level of illumination caused in the mindset of people owing to the region wide literacy and sector reforms initiated by the government. Other reasons are the increased level cover and additional premiums provided to the beneficiary, rising per capita income of the country, urge among people to protect their dependents, ensure high quality of life proof from any uncertainty, pricing and promotional strategies used by the companies, rising population, marital status of the people, changing buying and expenditure pattern of people owing to changing trends and western influence not only on terms of attire but also to copy their entire lifestyle, illustrating the example that more than 80% of people in the U.S are insured. Sometimes, reference group influence, technical aspects of the product which is the reliability, durability, comfort and convenience of the product also acts as a strong motivation to buy and use the new and evolving insurance policies and become a part of the so called elite and educated crowd. The above mentioned factors have definitely provided the industry a new shape and provided enormous development and growth opportunities for various companies existing in the industry. The only point of concern here is that how can the companies turn this changing and evolving mindset into their benefit. The only thing which can be done here is to touch the emotional part of the individuals which will ignite the buying thrive in the individuals to purchase and use the insurance products. India is a country that can provide home to multiple companies in the industry, the reason can only be because of the innumerable benefits that the government is providing in addition to the huge and tremendous domestic demand that may also restrict the firms to go to international borders to maintain their profit margins. The urge of increased demand created by the more liberalised and radical mindset of the population is an incentive for the industry.
7
lEafCraft Insights
Overview of Indian insurance industry 2013
MARKETING STRATEGIES OF VARIOUS INSURANCE COMPANIES LIC In India people mostly take insurance as an investment rather than risk cover. LIC though enjoying the first mover advantage continuously revamps its strategies to maintain a firm position in the industry. Being in the industry for more than 50 years experience definitely improves performance of the company. LIC has taken following steps to increase its market competitiveness and retain its dominant position in the insurance market: 1. Product development -Every year by taking market review it introduces new innovative plans and also withdraws those plans which have less market response. For example LIC observed that there is a top potential for the health insurances business. So in the year 2007-08 it had started one Health Insurance Department and the first product Health Plus was launched on 4 February, 2008. People also welcomed it. 2. Agents- LIC very well understands the pivotal role of the agents in selling of insurance policies. To promote them the corporation also gives stipends at the start of their career and to enable them to settle down in the profession. As on 31-03-2008 there were 17,684 urban career agents and 22,324 rural career agents. 3. Microinsurance Plan- The LIC of India, not only concentrates on celebrity marketing and rich class segment but also launches insurance plan under a separate business vertical to extend security to the less privileged section of the society under business vertical „Jeevan Madhur‟ plan that was launched in Sept. 2006 by the LIC. It was observed that within 2.5 years it had provided 4.3 cover to the approx 2.5 million lives. TATA AIG This company thrives on some of the salient features that include: A guaranteed addition of the 10% of the sum assured if the policy has been in force for 10 years or more, if payable on death or maturity A reversionary or terminal bonus paid on death or maturity of the policy
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lEafCraft Insights
Overview of Indian insurance industry 2013
Availability of doctors, SMS campaigns, help lines, e commerce, network marketing, portal services plus crystal claim services, etc. are the other few marketing strategies of the company. IDBI FEDERAL LIFE INSURANCE COMPANY LIMITED The company has come up with a really beautiful ad for the promotion of its childsurance product with the tag line “plan jo fail na ho” which attracted nationwide attention. It is also engaging its personnel and actuaries to come up with novel, innovative and mind boggling products to attract and retain its loyal customers and increase its market share or in other words its reach. So that everyone gets maximum out of whatever minimum they have. SBI LIFE INSURANCE COMPANY LIMITED The company adopted both a reactive and proactive strategy that would fit the long term and short term at the same time. They were selling insurance policies across India to create goodwill for their products. Before finding a solution to the circumstances and business problems, the company tries to assess whether it is in house or out of shelf problem and tries to fit what is best for them but seldom go they reinventing the wheel. The company tried to go nearer to point of sale and offer more self service options by opening more number of retail outlets. HDFC STANDARD LIFE INSURANCE They continuously focus on developing new channels for distribution of their products. They provide commission for the increased business brought by the sales force. Continuous monitoring, focused efforts, cost variabalization , outsourcing initiatives, reducing operating expenses to strengthen marketing channels and other promotional programmes are some of the initiatives taken by the company. All the companies operating in the industry offer almost the same kind of products with little modifications done here and there. This has led to intensifying the competition in the industry. So the point which should now be emphasised by the firms in the industry should be in terms of penetration of masses and service aspects.
9
lEafCraft Insights
Overview of Indian insurance industry 2013
THE WAY AHEAD A situation where almost all the major industries are suffering an economic meltdown, Indian insurance industry can be said as one sector that is still experiencing a good economic growth. The adaptability of the industry to mould and shape itself as per the changing trends and lifestyle led it to carve out a safe path of growth and sustenance for itself. All the players in the industry are striving hard to provide the customers with the best possible solution through innovative, varied products and making their services easily accessible and more visible in the market. There is a tough competition in the industry each one trying to grab the market share of the other. Transition of the industry from non linked to unit linked insurance policies is one of the major change that lead to improvisation of the industry‟s services with the government liberalised policies and IRDA adding tint of flavour propagating the growth. The sector has immense potential as not even 50% of the population is insured in India. Growing population and rising standard of living of the people will further make the task of the companies less burdensome. More and more population can be insured only when the companies go for an extensive market research before actually designing or positioning their products and targeting them to the specific segments so that time and resources both can be saved. The companies should go and tap the rural population has there is huge rigorous strength in that crowd to provide with substantial profit margins. The focus of the insurance companies to target the densely populated areas instead of providing insurance to qualitative segment of the population can sweeten the emerging growing prospects of the industry. Its not far that India will become an insurance giant in the coming few years. A report by Deccan Herald predicts the Indian insurance industry to be worth $400 billion by the year 2020 further increasing the appeal of the industry. In a report titled, "India Life Insurance 2012: Fortune Favors the Bold," McKinsey & Co. sets out the positives. "All factors are in place for the Indian life insurance industry to blossom into one of the fastest-growing financial services markets in the world." So, we can say, the future of the industry is undoubtedly progressive and investment made in this sector would not go futile.
10
lEafCraft Insights
1
Outlook of Indian Insurance Industry lEafCraft Insights
Overview of Indian insurance industry 2013
INDEX Introduction.......................................................................................................................................3 Brief history.......................................................................................................................................4 Market share of different insurance companies for the financial year 2012...............................5 Status of the Indian insurance industry and its demographics.................................................... 6 Changing market dynamics: evolution of mindset of the Indian population.............................. 7 Marketing strategies for various companies...................................................................................8 The way ahead..................................................................................................................................10
2
lEafCraft Insights
Overview of Indian insurance industry 2013
INTRODUCTION Life is synonym to uncertainty and has become prone to contingency at any point of time. Any injury or accident can happen to anyone of us or our loved ones at any point of time. The material value of our life or immortal possessions of ours cannot be correctly estimated but of course we can keep a backup in case something fatal happens to them. This very function is served by insurance that provides us with a mental and financial security and makes our life easier in case some contingency happens. In short insurance is that extra security that helps to pay or replace a thing or even receive regular payments in case something unfavourable happens to our life or property without having to take the extra pain to arrange for funds after the casualty. Insurance in today‟s scenario serves the dual purpose of savings and security. It is particularly important now days because of the increased quantum of unpredictability and proneness or susceptibility to chronic infections and diseases on account of changing lifestyle, pollution, etc. The need to insure one‟s property arises because of the crime rate which is almost occupying every strata of the society. It is the call of the hour to provide oneself with an additional umbrella of protection because of the multiple benefits of insurance like: planning for later life stages, protection against rising health expenses, risk cover, safe and profitable long term investment, thrift or regular savings in an individual, tax benefits, assured income through annuities, facilities of loan without affecting the policy benefits, diverse and wide variety of insurance policies designed to cater the needs of everyone, mental security the value of which cannot be estimated, to take care of one‟s loved ones in case of his / her absence, etc. The benefits of insurance are innumerable which should keep anyone now in double mind whether they should insure themselves or not. The various types of insurance are: life insurance, health insurance, vehicle insurance, agricultural insurance, business insurance, unemployment insurance, marine insurance, casualty insurance, payment protection insurance, liability insurance, property insurance, child insurance, etc. The customised, innovative and novel products and services provided by different players in the industry further increases the growth and attractiveness of the industry.
3
lEafCraft Insights
Overview of Indian insurance industry 2013
BRIEF HISTORY The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. The Triton Insurance Company Ltd formed in 1850 and was the first of its kind in the general insurance sector in India. Established in 1907, Indian Mercantile Insurance Limited was the first company to handle all forms of Indian insurance. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912. The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets. Sector Reform in Indian insurance was initiated by the formation of the Malhotra Committee in1993. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India. The Malhotra Committee attempted to improve various aspects of the insurance sector, making them more appropriate and effective for the Indian market. The recommendations of the committee put stress on offering operational autonomy to the insurance service providers and also suggested forming an independent regulatory body. The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in 2000.The goals of the IRDA were to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc.
In India license raj was reduced and reduced tariffs and interest rates ended many public monopolies, allowing automatic approval of foreign direct investment in insurance sector. India has progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalisation.
4
lEafCraft Insights
Overview of Indian insurance industry 2013
MARKET SHARE OF DIFFERENT INSURANCE COMPANIES IN INDIA FOR THE FINANCIAL YEAR 2012
5
lEafCraft Insights
Overview of Indian insurance industry 2013
STATUS OF THE INDIAN INSURANCE INDUSTRY AND ITS DEMOGRAPHICS Indian insurance industry is a flourishing industry with several national and international players competing and growing at rapid rates. All this can be attributed to the reforms leading to the relaxation of the policy regulations that ignited the growth of the Indian insurance industry. The level of awareness and consciousness has risen among people for the need to insure them and elevation in the levels of literacy, population and urbanisation has added fuel to the fire leading to ever growing demand of the insurance products. The period from 2010-2015 has been regarded as the “GOLDEN AGE” for the Indian insurance industry probably because of the future prosperous growth predictions of the industry. The LIFE INSURANCE CORPORATION OF INDIA dominated the industry till 1990s after which few private players started entering the market. The annual growth rate of the Indian insurance industry varies between 15% - 20%. The entry of the private players in the industry around 2000-2001 initiated the growth of the industry. A study conducted by the Federation of Indian chamber of commerce and industry and the US based Boston Consulting Group reveals that the awareness and total penetration of insurance services [premiums as % of GDP] in India has increased from 2.3% in 2001 to 5.2% in 2011. The report further provided information that the number of life insurance policies in the year 2011 was 12 times more than the last decade and number of people taking the health insurance has risen 25 times. India is a US $41billion industry. Currently, in India only two million people {.2% of the total population of 1 billion} are covered under Mediclaim whereas in developed nations like USA about 75% of the total population are covered under some insurance scheme. As far as the conventional plan of life insurance policies are concerned, there is a growth of 11% in policies and 22% in premium according to the Minister of State for Finance. The Indian health insurance market accounted for 3.2 per cent of the overall insurance industry in the fiscal year 2011-2012. Key factors driving the growth of the health insurance sector were rising healthcare expenditure, increasing disposable income and the rise in the number of people with affluent lifestyles. Though the health insurance market is currently dominated by public-sector companies, the top six private health insurance companies increased their cumulative market share from 17.2 per cent to 29.1 per cent during 2007 to 2011. Keeping all these things in mind targeting and positioning of the products can be done accordingly in areas where demand can be created and penetration is low.
6
lEafCraft Insights
Overview of Indian insurance industry 2013
CHANGING MARKET DYNAMICS: EVOLUTION OF MINDSET OF THE INDIAN POPULATION There has been a radical change in the mindset of people in the last 10- 15 years regarding the insurance policies and its use. People earlier used to take this just as a means of protection but now people try to grab the multiple benefits which the products promise to provide ranging from security to investments to tax benefits to additional income and what not. The reason can be attributed to the level of illumination caused in the mindset of people owing to the region wide literacy and sector reforms initiated by the government. Other reasons are the increased level cover and additional premiums provided to the beneficiary, rising per capita income of the country, urge among people to protect their dependents, ensure high quality of life proof from any uncertainty, pricing and promotional strategies used by the companies, rising population, marital status of the people, changing buying and expenditure pattern of people owing to changing trends and western influence not only on terms of attire but also to copy their entire lifestyle, illustrating the example that more than 80% of people in the U.S are insured. Sometimes, reference group influence, technical aspects of the product which is the reliability, durability, comfort and convenience of the product also acts as a strong motivation to buy and use the new and evolving insurance policies and become a part of the so called elite and educated crowd. The above mentioned factors have definitely provided the industry a new shape and provided enormous development and growth opportunities for various companies existing in the industry. The only point of concern here is that how can the companies turn this changing and evolving mindset into their benefit. The only thing which can be done here is to touch the emotional part of the individuals which will ignite the buying thrive in the individuals to purchase and use the insurance products. India is a country that can provide home to multiple companies in the industry, the reason can only be because of the innumerable benefits that the government is providing in addition to the huge and tremendous domestic demand that may also restrict the firms to go to international borders to maintain their profit margins. The urge of increased demand created by the more liberalised and radical mindset of the population is an incentive for the industry.
7
lEafCraft Insights
Overview of Indian insurance industry 2013
MARKETING STRATEGIES OF VARIOUS INSURANCE COMPANIES LIC In India people mostly take insurance as an investment rather than risk cover. LIC though enjoying the first mover advantage continuously revamps its strategies to maintain a firm position in the industry. Being in the industry for more than 50 years experience definitely improves performance of the company. LIC has taken following steps to increase its market competitiveness and retain its dominant position in the insurance market: 1. Product development -Every year by taking market review it introduces new innovative plans and also withdraws those plans which have less market response. For example LIC observed that there is a top potential for the health insurances business. So in the year 2007-08 it had started one Health Insurance Department and the first product Health Plus was launched on 4 February, 2008. People also welcomed it. 2. Agents- LIC very well understands the pivotal role of the agents in selling of insurance policies. To promote them the corporation also gives stipends at the start of their career and to enable them to settle down in the profession. As on 31-03-2008 there were 17,684 urban career agents and 22,324 rural career agents. 3. Microinsurance Plan- The LIC of India, not only concentrates on celebrity marketing and rich class segment but also launches insurance plan under a separate business vertical to extend security to the less privileged section of the society under business vertical „Jeevan Madhur‟ plan that was launched in Sept. 2006 by the LIC. It was observed that within 2.5 years it had provided 4.3 cover to the approx 2.5 million lives. TATA AIG This company thrives on some of the salient features that include: A guaranteed addition of the 10% of the sum assured if the policy has been in force for 10 years or more, if payable on death or maturity A reversionary or terminal bonus paid on death or maturity of the policy
8
lEafCraft Insights
Overview of Indian insurance industry 2013
Availability of doctors, SMS campaigns, help lines, e commerce, network marketing, portal services plus crystal claim services, etc. are the other few marketing strategies of the company. IDBI FEDERAL LIFE INSURANCE COMPANY LIMITED The company has come up with a really beautiful ad for the promotion of its childsurance product with the tag line “plan jo fail na ho” which attracted nationwide attention. It is also engaging its personnel and actuaries to come up with novel, innovative and mind boggling products to attract and retain its loyal customers and increase its market share or in other words its reach. So that everyone gets maximum out of whatever minimum they have. SBI LIFE INSURANCE COMPANY LIMITED The company adopted both a reactive and proactive strategy that would fit the long term and short term at the same time. They were selling insurance policies across India to create goodwill for their products. Before finding a solution to the circumstances and business problems, the company tries to assess whether it is in house or out of shelf problem and tries to fit what is best for them but seldom go they reinventing the wheel. The company tried to go nearer to point of sale and offer more self service options by opening more number of retail outlets. HDFC STANDARD LIFE INSURANCE They continuously focus on developing new channels for distribution of their products. They provide commission for the increased business brought by the sales force. Continuous monitoring, focused efforts, cost variabalization , outsourcing initiatives, reducing operating expenses to strengthen marketing channels and other promotional programmes are some of the initiatives taken by the company. All the companies operating in the industry offer almost the same kind of products with little modifications done here and there. This has led to intensifying the competition in the industry. So the point which should now be emphasised by the firms in the industry should be in terms of penetration of masses and service aspects.
9
lEafCraft Insights
Overview of Indian insurance industry 2013
THE WAY AHEAD A situation where almost all the major industries are suffering an economic meltdown, Indian insurance industry can be said as one sector that is still experiencing a good economic growth. The adaptability of the industry to mould and shape itself as per the changing trends and lifestyle led it to carve out a safe path of growth and sustenance for itself. All the players in the industry are striving hard to provide the customers with the best possible solution through innovative, varied products and making their services easily accessible and more visible in the market. There is a tough competition in the industry each one trying to grab the market share of the other. Transition of the industry from non linked to unit linked insurance policies is one of the major change that lead to improvisation of the industry‟s services with the government liberalised policies and IRDA adding tint of flavour propagating the growth. The sector has immense potential as not even 50% of the population is insured in India. Growing population and rising standard of living of the people will further make the task of the companies less burdensome. More and more population can be insured only when the companies go for an extensive market research before actually designing or positioning their products and targeting them to the specific segments so that time and resources both can be saved. The companies should go and tap the rural population has there is huge rigorous strength in that crowd to provide with substantial profit margins. The focus of the insurance companies to target the densely populated areas instead of providing insurance to qualitative segment of the population can sweeten the emerging growing prospects of the industry. Its not far that India will become an insurance giant in the coming few years. A report by Deccan Herald predicts the Indian insurance industry to be worth $400 billion by the year 2020 further increasing the appeal of the industry. In a report titled, "India Life Insurance 2012: Fortune Favors the Bold," McKinsey & Co. sets out the positives. "All factors are in place for the Indian life insurance industry to blossom into one of the fastest-growing financial services markets in the world." So, we can say, the future of the industry is undoubtedly progressive and investment made in this sector would not go futile.
10
lEafCraft Insights
