Risk Mart Seen Growing Five-Fold In 7 Years

The Indian insurance market is estimated to post a five-fold growth in business to Rs 250,000 crore in the next seven years, according to leading global consultant PriceWaterhouseCoopers.

Speaking at the Ficci-organised international seminar on insurance, Shakti Saran, head of insurance, PwC, predicted the general insurance business to grow ten times to Rs 100,000 crore from the current Rs 10,000 crore by 2008. The life insurance market, on the other hand, is expected to grow 3.5-4 times to Rs 125,000-Rs 150,000 crore from the current Rs 35,000 crore, he said.

According to Saran, the group insurance, single premium policies and keyman insurance would gain in popularity and post manifold growth. He said there would be enhanced activity in the life insurance business and retirement benefit reforms would gain momentum.

 

In the case of non-life insurance, PwC predicted a rapid growth of personal lines which would be aided by commoditisation of products. Saran said product-bundling would be a major factor in selling retail non-life products. Insurers would also devise specialised commercial products to cater to niche market segments. "Even during the time when state-owned insurers had a monopoly, 15 kidnap insurance covers had been sold," he said.

Saran said the growth would be more pronounced in the general insurance business as a large part of the market still remain untapped. Health, credit and crop and cattle insurance are some of the untapped business segments, he said. He added that large activity would be witnessed in the re-insurance market, particularly with respect to catastrophe, terrorism and war risk covers.

Saran said that contrary to popular belief, rural insurance was very profitable. He, however, warned that insurers would need to promote the business before actually selling it. Also, the niche markets would require high levels of service and there was a need to have the right mix of distribution channels, he added.