Emerging Rural Insurance Market in India

Jan. 25, 2008 - PRLog -- India is fast emerging on the world map as a strong economy and a global power. The country is going through a phase of rapid development and growth. All the vital industries and sectors of the country are registering growth and thus, luring foreign investors. And insurance sector is one of them. To throw light on the Indian insurance sector, “Emerging Rural Insurance Market in India” that gives an extensive research and in-depth analysis of the insurance sector in India. This report helps clients to analyze the leading-edge opportunities critical to the success of the insurance industry in India. Based on this analysis, the report gives a future forecast of the market that is intended as a rough guide to the direction in which the market is likely to move.

Market Analysis

With a huge population and large untapped market, insurance happens to be a big opportunity in India. The insurance business (measured in the context of first year premium) grew by 47.93% in 2005-06, surpassing the growth of 32.49% achieved in 2004-05. However, insurance penetration in the country continues to be low.

Insurance penetration or premium volume as a share of a country’s GDP for the year 2005 stood at 2.53% for life insurance and 0.62% for non-life insurance. The level of penetration tends to rise as income increases, particularly in life insurance. India, with its huge middle class households, has exhibited potential for the insurance industry. This has made international players to look at the Indian market. Moreover, saturation of markets in many developed economies has made the Indian market all the more attractive for global insurance majors.

Key Findings
The total life insurance premiums market in India could grow from Rs 16,8600 Crore (Nearly US$ 42.85 Billion, Rs 1 = US$ 0.0254146) in 2006-07 to Rs 1,230,000 Crore (Nearly US$ 312.6 Billion, Rs 1 = US$ 0.0254146) by 2010-11.
The total non-life insurance premium is expected to increase at a CAGR of nearly 24.7% for the period spanning from 2007-08 to 2010-11.
With the entry of several low cost airlines along with fleet expansions by existing ones and increasing corporate aircraft ownership, the Indian aviation insurance market is all set to boom in a big way in coming few years.
The home insurance segment is set to achieve a 100% growth as latest inclusion by financial institutions have made home insurance obligatory for housing loans approval.
Health insurance is poised to become the second largest business for non-life insurers in the next three years after motor insurance.
A booming life insurance market has propelled the Indian life insurance agents into the top 10 country list in terms of membership to the Million Dollar Round Table (MDRT) — an exclusive club for the highest performing life insurance agents.
Key Issues and Facts
Where does India stands in the context of emerging countries?
What are key reasons behind attractiveness of Indian insurance market?
What are growing insurance segments in India?
What are various opportunity areas in the market?
What is the status of Microinsurance in India?
What are the various avenues for the growth of Microinsurance in India?
What are the various challenges faced by the Microinsurance sector?
What initiatives the government is taking to promote the Indian insurance market?
Who are the major players engaged in providing Microinsurance in the country?
Key Players

The major players discussed in the report are Life Insurance Corporation of India, Bajaj Allianz, ICICI Prudential, HDFC Standard, and SBI Life under life insurance segments and New India, National Insurance, Oriental, United India, and ICICI Lombard under non-life insurance segments.

Research Methodology Used

Information Sources
Information has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to more than 3000 paid databases.

Analysis Methods
The analysis methods include ratio analysis, historical trend analysis, and linear regression analysis using software tools, judgmental forecasting and cause and effect analysis.
Table of Content
1. Analyst View
2. Insurance Industry - Emerging Markets
2.1 Top Ten Emerging Insurance Markets
2.1.1 Life Insurance
2.1.2 Non-life Insurance
3. Why India is the Right Place for Investment in Insurance Sector?
3.1 Strong Economic Growth
3.2 Low Insurance Penetration
3.3 Untapped Semi-urban & Rural Markets
3.4 Rapid Urbanization
3.5 Robust Growth in Population
3.6 Growing Personal Income
3.7 High Saving Tendency
3.8 Rising Awareness Level
3.9 Most Developed Countries Reaching Saturation
3.10 Government Initiatives
4. Insurance Industry - India
4.1 Performance
4.1.1 Life Insurance
4.1.1.1 By Products
4.1.1.2 By Segments
4.1.1.3 By Distribution Channels
4.1.2 Non-life Insurance
4.1.2.1 Motor
4.1.2.2 Fire
4.1.2.3 Health
4.1.2.4 Marine
4.1.2.5 Engineering
4.1.2.6 Personal Accidents
4.1.2.7 Liability
4.1.2.8 Aviation
4.1.2.9 Others
4.1.2.9.1 Travel
4.1.2.9.2 Credit
4.1.2.9.3 Home
4.2 Analysis
4.2.1 Opportunities
4.2.1.1 Takaful Insurance
4.2.1.2 TPA
4.2.1.3 Insurance BPOs
4.2.1.4 Pension & Provident Fund Institutions
4.2.1.5 Pharmaceutical Market
4.2.1.6 Banking Industry
4.2.1.7 IT Sector
4.2.2 Challenges
4.2.2.1 Growing Claims
4.2.2.2 High Policy Lapsation Rate
4.2.2.3 Rising Agent Attrition
4.2.2.4 Changing Market Demand
4.2.2.5 Unpredictable Climatic Conditions
5. Rural Insurance - An Overview
6. Microinsurance Industry
6.1 Performance
6.1.1 Organizations Involved
6.1.2 Level of Experience
6.1.3 Geographical Distribution
6.1.3.1 By Rural/Urban
6.1.3.2 By States
6.1.4 Contribution Types
6.1.5 Insurance Coverage
6.2 Recent Products & Developments
6.3 Government Initiatives for Promoting Microinsurance
6.4 Key Microinsurance Institutions
6.4.1 Yeshasvini
6.4.2 Spandana
6.4.3 SEWA
6.5 Scope for Growth
6.5.1 Joint Effort
6.5.2 Composite Insurance
6.5.3 Orientation for Small Pilots
6.5.4 Data & Experience Sharing
6.6 Challenges to Overcome
6.6.1 Awareness & Education
6.6.2 Premium Routing
6.6.3 Documents for Certification
6.6.4 Lack of Customized Products
6.6.5 High Policy Lapsation in Rural Areas
6.6.6 Minimal Targets for Rural Areas
7. Future Outlook (2007-08 to 2010-11)
7.1 Life Insurance
7.2 Non-life Insurance
8. Key Industry Contributors
8.1 Life Insurance
8.1.1 Life Insurance Corporation of India
8.1.2 Bajaj Allianz
8.1.3 ICICI Prudential
8.1.4 HDFC Standard
8.1.5 SBI Life
8.2 Non-life Insurance
8.2.1 New India
8.2.2 National Insurance
8.2.3 Oriental
8.2.4 United India
8.2.5 ICICI Lombard
List of Tables
Table 2-1: Emerging Markets - Top Ten Life Insurance Markets by Premium (in Million US$), 2005
Table 2-2: Emerging Markets - Top Ten Non-life Insurance Markets by Premium (in Million US$), 2005
Table 4-1: India - Number of Registered Insurers (Sep 2007)
Table 4-2: India - Top Countries on MDRT by Registered Membership, 2006
Table 4-3: India - Gross Non-life Insurance Premium by Private Insurer (in Crore Rs), Apr-Aug 2006 & Apr-Aug 2007
Table 4-4: India - Key Insurers offering Marine Insurance, 2006
Table 4-5: India - NPA by Type of Bank (in Crore Rs), 2003-04 to 2005-06
Table 4-6: India - Number of Lapsed Individual Life Insurance Policies of Non-linked Business (2005-06)
Table 6-1: India - List of Microinsurance Organizations, 2005


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