The Knowledge Centre - India: The Next Insurance Giant

Indian Insurance MarketStore this angel in big sizeNew Delhi, May 6th 2008: Indian abridgement is the 12th better in the world, with a GDP of $1.25 abundance and 3rd better in agreement of purchasing ability parity. With factors like a abiding 8-9 per cent anniversary growth, ascent adopted barter reserves, a booming basic bazaar and a rapidly accretion FDI inflows, it is on the blueprint of an anytime accretion advance curve.

Insurance is one above area which has been on a connected advance ambit back the awakening of Indian economy. Taking into anniversary the huge citizenry and growing per capita assets besides several added active factors, a huge befalling is in abundance for the allowance companies in India. According to the latest analysis findings, about 80% of Indian citizenry is after activity allowance awning while bloom allowance and non-life allowance continues to be below all-embracing standards. And this allotment of the citizenry is aswell subjected to anemic amusing aegis and alimony systems with hardly any old age assets security. As per our findings, allowance in India is primarily acclimated as a agency to advance claimed affairs and for assets tax planning; Indians accept a addiction to advance in backdrop and gold followed by case deposits. They selectively advance in shares aswell but the allotment is actual small--4-5%. This in itself is an indicator that advance abeyant for the allowance area is immense. It’s a business growing at the amount of 15-20% per annum and anon is of the adjustment of $47.9 billion.

India is a all-inclusive bazaar for activity allowance that is anon proportional to the advance in premiums and an access in activity density. With the access of clandestine area players backed by adopted expertise, Indian allowance bazaar has become added vibrant. Competition in this bazaar is accretion with company’s connected accomplishment to allurement the barter with new artefact offerings. However, the bazaar allotment of clandestine allowance companies charcoal actual low -- in the 10-15% range. Even to this day, Life Insurance Corporation (LIC) of India dominates Indian allowance sector. The abundant duke of government still dominates the market, with amount controls, banned on ownership, and added restraints.

Market Performance & Forecast

In 2000, Indian allowance bazaar admeasurement was $21.71 billion. Between 2000 and 2007, it had an access of 120% and accomplished $47.89 billion. Between 2000 and 2007, absolute premiums maintained an boilerplate advance amount of 11.96% and the CAGR advance during this time anatomy has been 11.96%. It was one of the a lot of connected advance patterns we accept noticed in any added arising economies in Asian as able-bodied as Global markets.

Major Driving Factors
=> Growing appeal from semi-urban citizenry
=> Entry of clandestine players afterward the deregulation
=> Rising appeal for retirement accouterment in the ageing population
=> The aperture of the alimony area and the enactment of the new alimony regulator
=> Rising per capita incomes a allotment of the able average class, and overextension affluence
=> Growing chump chic and access in spending & extenuative capacity
=> Public clandestine partnerships basement development
=> Dearth of avant-garde & buyer-friendly allowance products
=> Success of Auto allowance sector

Emerging Areas
=> Healthcare Insurance & Pension Plans
=> Mutual armamentarium affiliated allowance products
=> Multiple Distribution Networks .i.e. Banc assurance

The advancement advance trend started from 2000 was mainly due to bread-and-butter behavior adopted by the again Indian government. This year saw admission of an era of bread-and-butter liberalization and globalization in the Indian abridgement followed by several reforms and abiding behavior that created a absolute roadmap for the success of Indian banking markets. On the base of several macroeconomic factors like access in articulacy amount & per capita income, abatement in afterlife amount and unemployment, bigger tax rebates, growing GDP etc., we appraisal that the Indian allowance area will abound by $28.65 billion and ability $76.54 billion by 2011 with a CAGR of 12.44% and a advance of 59.82%.

The Indian activity allowance bazaar generated absolute revenues of $41.36 billion in 2007, appropriately apery a admixture anniversary advance amount (CAGR) of 11.84% for the aeon spanning 2000-2007. Life allowance bazaar had a advance of $22.46 billion aural a aeon of 7 years with a advance amount of 118.24%. Estimated activity premiums rose from INR1,470,800 actor ($36.77 billion) in 2006 to INR1,301,540 actor ($32.54billion) in 2005. We brainstorm that activity premiums in 2011 will be $65.96 billion, a advance beyond than they were in 2007. The achievement of the bazaar is anticipation to accelerate, with an advancing CAGR of 9.78% for the four-year aeon 2007-2011 accepted to drive the bazaar to a amount of $65.96 billion by the end of 2011. There would be a advance of $24.6 billion i.e. 59.48% in the next 4 years.

Non-life premiums in India were $6.53 billion in 2007. Gross accounting exceptional (GWP) in the Indian non-life allowance bazaar accomplished a amount of $5.75 billion in 2006, this apery an anniversary advance of 13.55% for the aeon spanning 2006-2007. Estimated non-life premiums rose from INR230 billion ($5.75 billion) in 2006 to INR261 billion ($6.53 billion) in 2007. We ahead that non-life premiums will abound by a CAGR of 9.40% amid 2007-2011. We are analytic for non-life premiums to acceleration by $405 actor over the 5 years to the end of 2011 with a advance amount of 62.02%.

Topics covered in the report
=> Trend appraisal of Indian abridgement and growing macroeconomic factors and
=> India’s position in the ambience of arising countries
=> Historical advance trends & advance drivers of Insurance & its sub-sectors in India and angle till 2011.
=> Market admeasurement of allowance area (total, activity & non-life) back 2000 till 2007
=> Market anticipation of allowance area (total, activity & non-life) amid 2007 and 2011
=> Key issues & challenges, above trends & opportunities
=> Government’s initiatives to advance & adapt the allowance market
=> Competitive mural and bazaar allotment of top players
=> And abounding more...

Table of Contents

METHODOLOGY & RESEARCH APPROACH

EXECUTIVE SUMMARY

1.INDIA
1.1.ECONOMY
1.1.1.Performance in FY2007
1.1.2.Growing Per Capita Income
1.1.3.Macroeconomic trends
1.1.4.Future predictions
1.2.GOVERNMENT POLICIES

2.INDIAN INSURANCE SECTOR
2.1.MARKET OVERVIEW
2.1.1.Insurance Sector vs. Macro-economic factors
2.2.MARKET PERFORMANCE & FORECAST (2000-2011)
2.2.1.Indian Insurance Market
2.2.1.1.Indian Life Insurance Market
2.2.1.2.Indian Non-Life Insurance Market
2.3.DRIVING FACTORS
2.3.1.Opening of Pension sector
2.3.2.Growing Per Capita Income & Changing Demographics
2.3.3.Macro-Economic and Demographic Growth Drivers
2.3.4.Other Major Drivers
2.4.TRENDS, ISSUES AND OPPORTUNITIES – AN ANALYSIS
2.4.1.Major Issues
2.4.2.Emerging sectors for Insurance
2.4.3.Emergence of Multiple Distribution Networks
2.4.4.Consolidation of Distribution Strategy
2.4.5.Targeting alcove chump abject with customized products
2.4.6.Stagnating exceptional advance and basal opportunity
2.4.7.The Deregulation of the Insurance Market in India (w.e.f. January 1, 2007)
2.4.8.Proposed stages of abatement of the tariffs
2.4.9.Insurance area active Indian CRM market
2.4.10.Product Preferences a allotment of Consumers
2.4.11.Success of Auto Insurance Sector
2.4.12.Other above hurdles
2.5.GOVERNMENT REGULATIONS
2.5.1.Insurance Acts
2.5.2.Government backed allowance schemes
2.5.3.Reforms in Insurance Sector
2.6. COMPETITIVE LANDSCAPE
2.6.1. Competition in Life Insurance Sector
2.6.1.1 Market Share & Segmentation
2.6.1.2. Life Insurance - Five Forces Analysis
2.6.2.Competition in Non-Life Insurance Sector
2.6.2.1. Market Share & Segmentation
2.6.2.2. Non-Life Insurance - Five Forces Analysis
2.7. COMPANY PROFILES – TOP PLAYERS
2.7.1.Bajaj Allianz General Insurance Co. Ltd
2.7.2.ICICI Lombard General Insurance Company
2.7.3.IFFCO-TOKIO General Insurance (ITGI)
2.7.4.National Insurance Company Limited
2.7.5.The New India Assurance Co. Ltd.
2.7.6.The Oriental Insurance Company Limited
2.7.7.Reliance General Insurance
2.7.8.Royal Sundaram Alliance Insurance Co. Ltd
2.7.9.Tata AIG General
2.7.10.United India Insurance Company Limited
2.7.11.Bajaj Allianz Life Insurance Company Limited
2.7.12.ICICI Prudential Life Insurance Company

Pages: 130
Format: PDF
Authors: Akash Rakyan and Nishith Srivastava

Lists of Charts

Chart 1: GDP growth, per capita assets and admeasurement of country by GDP in 2014f
Chart 2: Macroeconomic Data & Factors
Chart 3: Government Debt- India (% of GDP)
Chart 4: Annual Inflation Rate (CPI) - India %
Chart 5: Total Premium Growth vs. GDP Growth (%) – 2000-2007e
Chart 6: Life Insurance vs. Non-Life Insurance vs. Total Premium vs. GDP (%) – 2000-2008f
Chart 7: India Insurance Market Value ($ billion): 2000-2007e
Chart 8: India Insurance Market Value Forecast ($ billion): 2008-2011f
Chart 9: India Insurance Market: Segment Share (2007e)
Chart 10: India Life Insurance Market Value ($billion): 2000-2007e
Chart 11: Asia-Pacific Life Insurance Market Segmentation: % allotment in 2006e
Chart 12: India Life Insurance Market Share: % Share, by Value, 2006-2007e
Chart 13: India Life Insurance Market Value Forecast ($billion): 2008-2011f
Chart 14: India Non-Life Insurance Market Value ($billion): 2000-2007e
Chart 15: India Non-Life Insurance Market Value Forecast ($billion): 2007-2011f
Chart 16: Sub-sector allotment of Non-life Insurance Market in India (2007e)
Chart 17: India Non-life Insurance Market Share: % Share, by Value, 2006-2007e
Chart 18: Market Share of arch activity allowance companies in India (% share) – 2007e
Chart 19: India Life Insurance Market Segmentation (%share & $billion value): 2010-2011f
Chart 20: India Non-Life Insurance Market Segmentation (%share & $billion value): 2006-2007e
Chart 21: India Non-Life Insurance Market Segmentation (%share & $billion value): 2010-2011f

List of Charts

Table 1: GDP Growth (2002-07)
Table 2: Total Premium Growth & GDP Growth (%) – 2000-2007
Table 3: Growth (%): Life Insurance vs. Non-Life Insurance vs. Total Premium vs. GDP (%) – 2000-2008f
Table 4: India Insurance Market Value ($billion): 2000-2007e
Table 5: India Insurance Market Value Forecast ($ billion): 2008-2011f
Table 6: India Life Insurance Market Value ($billion): 2000-2007e
Table 7: Asia-Pacific Life Insurance Market Segmentation: % allotment in 2006
Table 8: India Life Insurance Market Share: % Share, by Value, 2006-2007e
Table 9: India Life Insurance Market Value Forecast ($billion): 2008-2011f
Table 10: India Non-Life Insurance Market Value ($billion): 2000-2007e
Table 11: India Non-Life Insurance Market Value Forecast ($billion): 2007-2011f
Table 12: India Non- Life Insurance Market Share: % Share, by Value, 2006-2007e
Table 13: India Insurance Market Segmentation (%share & $billion values): 2006-2007e
Table 14: India Insurance Market Segmentation (%share & $billion value): 2010-2011f
Table 15: Market Share of arch activity allowance companies in India – 2007e
Table 16: India Life Insurance Market Segmentation (%share & $billion value): 2010-2011f
Table 17: India Non-Life Insurance Market Segmentation (%share & $billion value): 2006-2007e
Table 18: India Non-Life Insurance Market Segmentation (%share & $billion value): 2010-2011f

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