Govt-sponsored Health Insurance Plans To Grow Fastest, Non-life Insurance Market To Be Worth Rs 90,000 Cr by 2015: ASSOCHAM

The non-life insurance industry in India is estimated to grow at over 18 per cent till 2015 and reach a total size of Rs 90,000 crore, ASSOCHAM said on Sunday in a press release.

The non-life insurance industry is estimated to grow at over 18 per cent till 2015 and reach a total size of Rs 90,000 crore from the current level of Rs 47,000 crore, apex chamber ASSOCHAM said on Sunday.

With this trajectory, India will be one of the fastest growing markets in Asia and globally – next only to China among major markets.

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Motor insurance will continue to remain the largest category, contributing over 40 per cent of industry premiums. India will become the third largest car market globally by 2020 with over 70 lakh cars sold annually, driving growth in motor insurance.

On the other hand, total expenditure on healthcare will be Rs 20 lakh crore, creating significant opportunities for coverage through health insurance. “The health insurance segment will grow the fastest and account for close to 30 per cent of total industry premiums by 2015,” said secretary general D.S. Rawat.

Within health insurance, the government sponsored health schemes will grow the fastest while retail will emerge as the largest opportunity, he said.

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The country’s infrastructure expenditure over the next five years is likely to be Rs 47 lakh crore, creating opportunities for insuring these projects. Engineering insurance coverage for new projects will be an important area of growth, leading to opportunities in segments like commercial lines.

With small and medium enterprises growing at 20 to 22 per cent, the non-life insurance market will be particularly attractive for players who can bring in skills and more innovative practices to capture the opportunities.

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An increase in penetration rate from 30 per cent to some 50 per cent in 2014-15 across large (about 10,000 customers with premiums in the range of Rs 10 lakh to 25 lakh), medium (80,000 customers with Rs 1 lakh to 10 lakh premiums) and small (102 lakh customers with less than Rs 1 lakh premiums) bases in the SME segment will drive a 2.5 times increase in premiums.

There is already evidence of increasing competition with the number of companies increasing from 16 in 2007 to 24 this year and four to five more in the pipeline, said ASSOCHAM.

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Between 1999 and 2009, there were 23 districts in the country with GDP growth rates of 9 to 10 per cent. Between 2009 and 2025, 22 districts are likely to fall in this growth category. Further, the cities of today will be much bigger in size and will require a fundamentally different commitment in terms of resources.

For instance, Bangalore’s GDP in 2030 will be four times bigger than Mumbai’s in 2010. Or Kochi will be generating more or less the same GDP as Mumbai does today. “Any strategic decisions based on just backward looking facts will likely miss out on these growth pockets and what it takes to capture share in them.”

High-quality and low-cost broadband access through mobile and hand-held devices through 3G and 4G services will provide a unique opportunity to leap front legacy issues and drive innovations which can help unlock growth, reduce costs and enhance service levels, said ASSOCHAM.

Source-Medindia