life insurance sector to see 12-15% cagr over five years' _ business standard
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8/13/2019 'Life Insurance Sector to See 12-15% CAGR Over Five Years' _ Business Standard
http://slidepdf.com/reader/full/life-insurance-sector-to-see-12-15-cagr-over-five-years-business 1/9
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insurance sector to see 12-15% CAGR over five years' | Business ... http://www.business-standard.com/article/finance/life-insurance-sector-...
9 21-11-2013 00:45
8/13/2019 'Life Insurance Sector to See 12-15% CAGR Over Five Years' _ Business Standard
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Finance » News » Insurance
BS Reporter | Mumbai September 20, 2013 Last Updated at 00:46 IST
'Life insurance sector to see 12-15% CAGR over fiveyears'Life insurance penetration measured as percentage of insurance premium to GDP expected to growth to5% by year 2020 from 3.2% now
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The Life Insurance Council, the industry body of life insurers in India, has estimated the sector to record acompounded annual growth rate (CAGR) of 12-15 per cent over the next five years.
Life insurance penetration measured as the percentage of insurance premium to gross domestic product ( GDP) isexpected to grow to five per cent by 2020 from the current 3.2 per cent, according to the council.
“Life insurance industry has about 36 crore (360 million) in-force policies and is a high capital-intensiveindustry. With favourable demographics, new products launches on the anvil, industry expanding their operationsand infusing efficiencies the industry will see significant growth in India,” said V Manickam, secretary general,Life Insurance Council .
The council said favourable Indian demography — insurable population, expected to grow to 750 million and lifeexpectancy to 74 years by FY2020 — would help achieve spurt in the preference for life insurance. Thus, lifeinsurance, which is the second most preferred financial instrument, would drive growth in net householdfinancial savings to an estimated 35 per cent of total savings in the next seven years, compared with a meagre 26per cent in FY10.
The council also estimated a potential foreign exchange inflow of $10 billion in the near term, when the foreigndirect investment (FDI) in insurance increases to 49 per cent,.
According to the council, life insurers also plan to expand their distribution channel and increase the number of life insurance advisers to more than three million over the next five years and is expected to contribute Rs 3.5lakh crore towards infrastructure projects by FY20. Assets under management (AUMs) of life insurers have risento Rs 17.41 lakh crore as on March 31, 2013, compared with Rs 1.94 lakh crore in 2000-01.
Data from the council showed the total revenue from life insurers for 2012-13 stood at Rs 4.1 lakh crore, of which Rs 1.23 lakh crore was investment income, Rs 1.79 lakh crore was renewal premium and Rs 1.07 lakh
crore was new business premium.The total benefits paid to customers by the Indian life insurance industry in most challenging period, hasincreased to Rs 1.91 lakh crore as on March 31, 2013, compared with Rs 1.41 lakh crore in March 2011. Inaddition, there has been a marked improvement in death claims settled by life insurers in terms of the number of
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8/13/2019 'Life Insurance Sector to See 12-15% CAGR Over Five Years' _ Business Standard
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policies as also by the amount and the time taken to settle death claims. Life Insurance Council asks for extension of new product guidelineimplementation deadlineIrda may not extend October 1 deadlineLife Insurance Council has asked the insurance regulator for an extension inthe deadline for implementation of the new traditional product guideline.
From October 1, life insurance companies cannot sell products that do notconform to the new product guidelines for traditional products. V Manickam, Secretary General, Life Insurance Council said that afterrepresentation from the life insurers, they have proposed an extension of theOctober 1 deadline. He added that they expected a positive outcome fromthe Insurance Regulatory and Development Authority (Irda). Meanwhile, Irda officials said that they are not looking to give any furtherextensions to enter the new product regime, since most life insurancecompanies have filed adequate products for re-filing.
On October 1, all life insurers are required to be ready with their newbouquet of products to be available to customers. With the deadline merely15 days away, life insurance companies are leaving no stone unturned toensure that their products are out in the market on time. Insurance Regulatory and Development Authority (Irda) bought out thetraditional product guidelines in February this year, which mandated lifeinsurers to be complaint with the new norms by October 1, 2013. Theirexisting products are being re-filed with the regulator. However, life insurance experts said that several players have not been ableto get their entire portfolio ready for customers. If they do not have therequisite number of products by October 1, they will have an incomplete setof products for customers.
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insurance sector to see 12-15% CAGR over five years' | Business ... http://www.business-standard.com/article/finance/life-insurance-sector-...
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8/13/2019 'Life Insurance Sector to See 12-15% CAGR Over Five Years' _ Business Standard
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Dr.S.Jayaprakash
How long Business Standard will publish the news as it is. Insurance sector has shownlot of promises in the past but not achieved as well. It is not enough for a paper like BSto be just a mirror but give readers an X-Ray view about point/counter points. InsuranceIndustry is struggling with lot of issues like high level attrition, churning of policies,unknown policy languages etc. If at all it has to grow, it has to be because of inflationrate, wherein the premium will automatically grow due to inflation. Withouth growingIIP, without innovative life products, without healthcare insurance, insurance sector will
remain only as paper tigers and media will be just printing it.24-09-2013 18:11:13 | Reply
N R Lakshminarasimhan
More Insurance Advisors are concentrating on the existing products to outsell oreducate the customer but also intend that they cover the maximum lives in each andevery famiy. Still there are a lot of educated youth who do not understand the meaning
of saving and investment in life insurance as they are not compeled by their parentswho are the guiding force today to the youth of India.
21-09-2013 12:21:29 | Reply
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insurance sector to see 12-15% CAGR over five years' | Business ... http://www.business-standard.com/article/finance/life-insurance-sector-...
9 21-11-2013 00:45
8/13/2019 'Life Insurance Sector to See 12-15% CAGR Over Five Years' _ Business Standard
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8/13/2019 'Life Insurance Sector to See 12-15% CAGR Over Five Years' _ Business Standard
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insurance sector to see 12-15% CAGR over five years' | Business ... http://www.business-standard.com/article/finance/life-insurance-sector-...
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