March 3, 2015
India’s insurance sector is expected to quadruple to about US$250 billion over the next decade from around US$60 billion at present, according to a study by the Confederation of Indian Industry (CII) prepared in partnership with consultancy firm McKinsey & Co. The report said that the Indian insurance industry is currently the 16th largest market in the world and is expected to be one of the top 10 markets by 2025. .
The study, “India Insurance Vision 2025” recommends an inclusive and progressive growth strategy for the industry . Such a strategy would enable the Indian life insurance industry to achieve 12% compounded annual growth rate (CAGR) to reach US$160 billion and the non-life insurance industry to see 22% CAGR to US$80 billion over the next 10 years, the report said. .
“The last few years have been challenging for the industry with declining growth in life insurance premiums and significant challenges in non-life profitability. This was driven by a combination of macroeconomic factors and structural challenges inherent in the insurance industry. “However, an improving economy with potential regulatory reforms and concerted action by industry players can usher in an era of significant growth as well as value creation,” the report added. .
Mr Analjit Singh, head of the CII national committee on insurance and pensions and Chairman of Max India, said that the industry has the potential to grow three to five times in size over the next decade. “For this to happen, policy action by the regulator, collaboration between players, and the individual player’s push to develop distribution and technical capabilities, would be critical,” he said.