The Indian insurance industry is expected to grow to USD 280 billion by FY 2020 with the government's flagship Ayushman Bharat - the National Health Protection Mission (AB-NHPM) and other growth drivers like rising disposable incomes, presence of global players and easing of the regulatory regime, helping penetration of the insurance culture in the country, according to an ASSOCHAM-APAS study.
Overall insurance penetration in the country reached 3.7 per cent in 2017 from 2.71 per cent in 2001. Gross premium increased from Rs 3.2 trillion (USD 49 billion) in FY12 to reach close to Rs 5 trillion (USD72 billion) in FY18 ,' jointly conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and APAS.
Push by the government and the regulator has helped increase the penetration of the insurance, as spread of schemes have also increased.
Several factors such as growing middle class, young population and increasing awareness towards the need for protection and retirement planning would enable the growth further, the latest study said.
It said, Ayushman Bharat , the ambitious scheme of the government, covering 100 million poor and vulnerable families with a cover of Rs 5 lakh per family of tertiary care and hospitalisation would be a game changer for the insurance industry, as it would have a great multiplier impact on a host of allied sectors and create lakhs of new jobs.
The private sector companies which presently hold close to 48 per cent market share in the general insurance and 29 per cent in the life insurance would see a big growth in the opportunities. The private sector hospitals would also be major partners in the roll out of the countrywide scheme for which an initial sum of Rs 12,000 crore has been provided.
The government has taken a number of initiatives to boost the insurance industry. The Foreign Direct Investment (FDI) limit has been increased from 26 per cent to 49 percent, while the regulator, IRDA, has allowed insurers investments up to 10 per cent in additional tier 1 (AT1) bonds that are issued by banks to increase their tier 1 capital. The medium-term outlook for the life insurance industry remains robust, with solid premium growth forecast over the next five years to 2023.
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