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OVERVIEW | OPPORTUNITIES
Insurance
OVERVIEW
SIZE
- Insurance is a US$41-billion industry in India, and grew by 36% in 2006-07 over
the previous year
- Life Insurance - US$35 billion industry with US$24 billion accounting for First Year Premium (inclusive of Single Premium)
- Non-Life Insurance - US$5.6-billion industry; motor and health segments account for 56% of total business
STRUCTURE
- Indian Insurance market was opened to private and foreign investment in
1999-2000
- The Indian Insurance industry consists of a total of 34 players
- Life: 1 public sector player; 16 private players
- Non-life: 6 public sector players; 11 private players
- Major international players like AIG, Aviva, MetLife, New York Life, Prudential, Allianz, Sun Life, Standard Life and Lombard are already present with minority stakes in joint ventures with Indian companies for both Life and Non-life segments
- The Life Insurance market is still dominated by Life Insurance Corporation (LIC) - a public sector company which had 75% share of first year premium in 2006-07
- In non-life, private sector companies (almost all are joint ventures with foreign insurers) accounted for 34% of the market in 2006-07
POLICY
- FDI up to 26% is permitted under the automatic route subject to obtaining a license from the Insurance Regulatory and Development Authority (IRDA)
- Intention to increase FDI up to 49%
- Insurance Regulatory Development Authority (IRDA) is the regulator for the Insurance industry
- In a landmark move the government detariffed the General Insurance business on 1st January, 2007
Life Insurance: Major Players
| Name of Company |
First year Premium
(2006-07, US$ million) |
| Public Sector |
| LIC |
13642 |
| Private Sector |
| ICICI Prudential |
1281 |
| Bajaj Allianz |
1041 |
| HDFC Standard Life |
395 |
| Birla Sun Life |
214 |
| Tata AIG |
156 |
Source: IRDA (Provisional)
Non-life Insurance: Major Players
| Name of Company |
First year Premium
(2006-07, US$ million) |
| Public Sector |
| New India Assurance |
1222 |
| National Insurance |
929 |
| Oriental Insurance |
960 |
| United India Insurance |
855 |
| Private Sector |
| ICICI Lombard |
732 |
| Bajaj Allianz |
440 |
| IFFCO Tokio |
280 |
| Reliance General Insurance |
222 |
| Tata AIG |
180 |
Source: IRDA (Provisional)
OPPORTUNITY
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Many international players have entered the Indian Insurance market
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Non-Life penetration is low in India - a potential growth area of the future |
OUTLOOK
- The Indian Insurance market is expected to be around US$52 billion
by 2010
- Expected CAGR of over 30% p.a.
POTENTIAL
- Largely untapped market with 17% of the world’s population
- Nearly 80% of the Indian population is without Life, Health and Non-life insurance
- Life Insurance penetration is low at 4.1% in 2006-07
- Non-life penetration is even lower at 0.6% in 2006-07
- The per capita spend on Life and Non-Life Insurance is US$33.2 and US$5.2 (2006-07), respectively compared to a world average of US$330 and US$224
- Strong economic growth with increase in affluence and rising risk awareness leading to rapid growth in the insurance sector
- Innovative products such as Unit Linked Insurance Policies are likely to drive future industry growth
- Investment opportunities exist in both life and non-life segments
- Total estimated investment opportunity of US$14-15 billion
For additional information:
Ministry of Finance (http://finmin.nic.in),
Insurance Regulatory and Development Authority (http://www.irdaindia.org)
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