The Associated Chambers of Commerce and Industry of India, citing a joint study conducted with research firm APAS said that, The Indian Insurance Industry is expected to grow to $280 billion by the year 2019-20, aided by the government’s flagship Ayushman Bharat health insurance scheme and other growth drivers like presence of the global players and ease of the regulatory regime, aid in penetrating the insurance culture in the country and growing disposable incomes.
In this joint study, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) also stated that the overall insurance penetration in the country had reached to 3.7% in the year 2017 from 2.71% in the year 2001, and that gross premium has reached from Rs 3.2 lakh crore (USD 49 billion) in FY12 to close to Rs 5 lakh crore (USD 72 billion) in FY18.
Additionally, the latest studies said that the push by the government and the regulator has helped in raising the penetration of the insurance with the growing spread of scheme. It also defined various factors that facilitate the growth further. Such factors include the growing middle class, the young population and the increase in awareness of the necessity for protection and retirement planning.
The government’s ambitious Ayushman Bharat Scheme covering 100 million poor and vulnerable families with a cover of Rs 5 lakh per family of tertiary care and hospitalization will be transformative for the Insurance Industry as it would have a great multiplier impact on a host of allied sectors and create lakhs of new jobs, it added.
According to the industry body, private sector companies, which presently hold close to 48 % market share in the country’s general insurance business and 29 % in Life Insurance, will see a big growth in opportunities. Moreover, the private sector hospitals would also be substantial partners in the rollout of the countrywide scheme for which an initial sum of Rs 120 billion has been provided.
“An effective implementation of the Ayushman Bharat scheme will help the entire healthcare and allied sectors like pharmaceutical, diagnostics, medical devices, data management, insurance hospitality, quality accreditation and human resource management through information and communication technologies across the value chain,” said the study conducted by industry chamber Assocham and research firm APAS. JD BAL.
The study showed that the domestic Life Insurance Industry registered 11 % year-on-year growth for new business premium in 2017-18, generating revenue of $30 billion. The premium for Non-life Insurance Industry has increased by 17.5 % year-on-year in the last fiscal.
A number of initiatives are taken up by the government to uplift the insurance industry. The Foreign Direct Investment (FDI) limit has been increased from 26 % to 49 %; while the Insurance Regulatory and Development Authority of India (IRDAI), has allowed insurers investments up to 10 % in additional tier 1 (AT1) bonds that are issued by banks to increase their tier 1 capital. The medium-term outlook for the life insurance industry remains robust, with solid premium growth forecast over the next five years to 2023.
Attributed to Mr. Rakesh Goyal, Director,
Probus Insurance Broker Limited
