The Economic Times, 22 November, 2006
General Insurance market in India is likely to double in the next four years to about Rs.40,000 crore of premium income by 2010, in a repeat performance of what happened during the last five years.
Total premium income reported by general insurers in the country increased two fold to Rs.20,957 crore in 2005 from Rs.10,290 crore in 2000, following the entry of private players. Its growth in coming years would be driven by health, automobile and rural segments, a senior executive said.
Mr. Antony Jacob, MD of Royal Sundaram Alliance Insurance, said that last few years in the industry were exciting. "And there is more excitement ahead if you look at its potential," he said, addressing the members of the ET Club at Department of Management Studies, Tagore Engineering College in Chennai on Tuesday.
Mr. Jacob said, while the growth has been significant in the past few years, potential is still greater. Insurance penetration (as a part of GDP) has grown from 0.4% in 2000 to 0.65% in 2005, but still far from countries such as UK which has a penetration of 3.68%. Similarly, premium per capita has grown from Rs.96 in 2000 to Rs.176 in 2005, against UK''s Rs.57,600."All these give an indication of areas that have not been tapped so far," he said.
He said, the country''s general insurance industry was moving from infant phase to early growth phase, and was still behind other BRIC countries China, Brazil and Russia. However, the economy as a whole is expected to maintain over 5% growth rate, even years after the growth rates of other BRIC countries slow down.
"Globalised manufacturing and booming service sectors are rapidly expanding the Indian economy resulting in rising income levels and expanding asset creation," he said. General insurance sector would benefit from economic growth, and the demand it creates for financial services.