Indian Insurance Industry Slated to Rise in Future

Jul 04, 2008

The Indian insurance industry is set to grow in future on the back of improving education level, tax exemptions and high growth in economy. Oriental Insurance Company, a leading insurance providing company in India, revealed that the Indian general insurance industry is expected to reach Rs 50,000 Crore (US$ 11.75 Billion) during 2009-2013, compared to Rs 28,130 Crore (US$ 6.52 Billion) in 2007-08, as reported by IndiaTimes. The Indian insurance industry also estimated that during 2008-09, the state-owned general insurance companies are aiming to touch the total premium income of around Rs 20,000 Crore (US$ 4.70 Billion), a 23% jump from Rs 16,259 Crore (US$ 3.82 Billion) in 2007-08. In 2007-08, the total premium covered by non-life insurance companies in India was Rs 28,126.29 Crore (US$ 6.61 Billion) against Rs 24,998.41 Crore (US$ 5.87 Billion) in 2006-07. According to market experts, tax benefits such as exemption of service tax on health insurance and personal accident insurances, encouragement to growth of independent agents together with abolition of sealing on commission plus the right to policy planning would be the key reasons for the projected growth in the Indian insurance industry. The insurance industry is also focusing on generating insurance development skills and is providing liberalized standards for the creation of intermediaries to enhance the insurance services that would help in achieving high growth in years to come. Moreover, the detariffing will initiate the launch of latest and innovative insurance products and exploitation of vast untapped insurance market would boost the revenue growth because the number of insurance companies is growing in India. The growth in the Indian insurance industry is also anticipated because the insurance sector is expected to pay an additional focus on micro and retail insurance in villages, which offers an extensive growth opportunity to players. Also, the rising education level accompanied by the booming economy ensures that the insurance market attracts an increasing number of customers. The growing population with improving purchasing power, encouraging to purchasing homes

and automobiles, is offering great scope for growth in Indian insurance market. A Senior Research Analyst at RNCOS said, The insurance industry in India is expected to grow at a rapid pace in future due to favorable business conditions in the country. The vast growth opportunities would help in attracting more foreign investors in the insurance sector. This would further help in the improvement of quality of the insurance products and schemes in the country.