India’s insurance sector is expected to quadruple to about $250 billion over the next decade from around $60 billion now, according to a report by the Confederation of Indian Industry (CII).
The vision report, prepared by the trade body in partnership with consultancy firm McKinsey & Co. and unveiled by the Insurance Regulatory and Development Authority (Irda) chairman TS Vijayan in Hyderabad on Thursday , recommends an inclusive and progressive growth strategy for the industry . Such a strategy would enable the Indian life insurance industry to report 12% compounded annual growth rate (CAGR) over the next 10 years to reach $160175 billion from around $46 billion now, the report said. The non-life or general insurance part of the industry is estimated to see 22% CAGR during this period, expanding to $80 billion from around $13 billion now, it said.
Vijayan said the regulator has allowed foreign reinsurance firms to open branches in India. He also announced the regulator’s decision on allowing insurance firms to recruit agents on their own, instead of appointing them from those who have qualified in an Irda-organised examination. Vijayan said the upcoming insurance Ordinance has several measures that would support growth. “Our priority would be to protect the interests of the policyholders and we need to ensure the satisfaction of the customer for which we are bringing certain changes in the new Act,“ he said, adding that the sec . 50,000 crore of fresh capital to tor needs at least ` achieve coverage of 6% from the existing 4%.The life insurance segment would require more capital over general insurance, he said.
Analjit Singh, head of the CII national committee on insurance and pensions and chairman of Max India, said 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, individual player’s push to develop distribution and technical capabilities would be critical,“ he said.
Source: The Economic Times (Mumbai)
Date: 27th Feb,2015