Insurance Market Clear Winner as India's Economy Goes from Strength to Strength

september

12th

Insurance Market Clear Winner as India’s Economy Goes from Strength to Strength

With a booming population set to overtake China as the world’s most populous nation by 2050, India is cementing itself on the world map as a strong economy and global power. The south Asian country appears increasingly attractive to western multinational companies scrambling to gain a slice of this new profitable source of income. As all the vital industries and sectors of the country are registering growth, the insurance sector is amongst the most popular, and provides an unmissable opportunity area for national as well as foreign investors.

An annual growth of 33% sees India’s life insurance market making it into the top five of the emerging global insurance economies. Following a privatisation of the life insurance sector in 2000, a number of private life insurers have been appointed by the insurance regulator. There are currently 19 private players, including ICICI , Aviva and Sahara, competing with the public sector life insurance giant, Life Insurance Corporation of India (LIC). LIC remains the largest in the country, but has suffered a significant drop in sales, allowing the private insurance players to witness a robust growth.

Also contributing to the rising Indian insurance market, home insurance is predicted to achieve a 100% growth in the near future. This optimistic forecast follows the decision to make home insurance obligatory for housing loan approvals. The risk of natural catastrophes has led to home insurance being regarded as a key safety net among the expanding Indian middle class, in order to have peace of mind when it comes to their valuables and belongings.

Along with the rise of the Indian motor industry, India’s primary non-life insurance market, motor insurance, is still predicted to continue its impressive growth. Over the last two years it has grown at an average rate of 45%, with total motor insurance premiums exceeding RS 129 billion. This is expected to continue well into 2008 and beyond.

With India’s rise to prominence as an economic powerhouse, there seems to be no end in sight for the growth of it’s insurance market. It is likely that if things continue as they have, it can only go from strength to strength.