Indian Insurance sector touted to record a 18% growth
According to K N Bhandari, the Secretary General of General Insurance Council, India's general insurance sector is slated to grow at a 18% rate in 2008. The comparable figure for 2007 was 13%. As per Mr. Bhandari, the present market value of the Indian general insurance sector is Rs 30,000-crore. The current penetration level of the Indian insurance sector is 0.65 %.
The Indian urban sector is a significant contributor to the general insurance market. In comparison, contribution from rural India is small. Efforts are afoot to capture the dormant rural market via strategies like awareness generation, institutional marketing and e-marketing.
Chidambaram calls for simple packages in the Indian Insurance sector
P Chidambaram, the Indian Finance Minister, has called for the insurance companies in India to make simple products for the Indian masses. It is expected that the products will then possess a high penetration power particularly in rural India.According to Mr Chidambaram, a simple product will gain more reception. It would be easier for the general populace to comprehend the product.
Some Industry analysts hold the view that, the Indian insurance companies are highly dependent on insurance agents for ensuring product penetration in rural areas.
Investment Strategies from LIC, India
Life Insurance Corporation (LIC) is India's biggest domestic institutional investor. It is also the largest life insurance company in India. The company has outlined a new investment strategy. LIC envisages to augment its equity investment by one third in 2008. However the company may allocate more funds for the debt market, particularly if the stock market volatility exists.
LIC plans to buy equities worth Rs 450 billion for the year 2008-09. The comparable figure for 2007-08 was Rs 340 billion. Thomas Mathew, LIC Managing Director expects the volatility in the stock markets to continue till October-November. As per Mr Mathew, at present the debt market is an attractive and relatively safe investment option. The prime objective of the company is to ensure the safety of the resources invested by the company's shareholders. LIC is slated to buy up bonds worth Rs1.15 trillion in the current fiscal year. LIC expects to earn a gross investment income ranging from Rs 400 billion to Rs 450 billion in the current year, depending upon the prevalent market conditions.
It may be noted that, LIC manages total assets worth around US$175 billion.
Young breed of pensioners in Indian insurance market
The Indian insurance market is being increasingly characterized by the presence of 'young pensioners', as per an article in the 'Times of India'. Young pensioners are typically under 40 individuals who are purchasing retirement plans.
The growing Indian economy has created an upwardly mobile ,affluent young generation, who believe in going for a planned retirement.
As per data from IRDA, 28% of the premiums collected by the Indian Insurance companies are from retirement plans.
Brokers battle out House Promoters, in Indian insurance market
Brokers in the Indian insurance market are fearing a price war from a new type of operating entity in the Indian insurance market. These are promoter houses, which are owed by different insurance companies.
IRDA has allowed insurance companies to establish own broking operations. This permission has been granted from April, 2008. Presently there exist 275 insurance brokers in India.
Insurance brokers are not generally affiliated to any particular insurer. Non-affiliated insurance brokers have asked IRDA to set up a regulatory system to diffuse any possible market crisis arising from a fierce 'price war' or 'rate discounting'.
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