The insurance market in India has indeed come to life. Prior to
privatization, it grew at an average rate of 10 to 15%. In the
subsequent years, the growth has been of the order of 25%
plus on an average. The era of swift growth is over and the sector is
expected to witness a stable period—with a growth rate of 10% in the
coming years. With profits hard to come by and capital looking scant,
many insurers, both life and general, are beleaguered to keep losses at bay.
It is no more an insurer competing with another insurer, but
an insurance company competing with banks, mutual funds and
other financial intermediaries. A deep segmentation will take place in
the insurance market with some companies becoming
financial conglomerates and others transforming themselves into niche
players. The time is ripe to take stock and perform a SWOT analysis of
the industry.
Despite the financial meltdown, the life insurance sector in India
has held up. The Life Insurance Corporation of India (LIC) is targeting
a growth of 19% in fresh premium collection in the financial year
2009-10. It could garner Rs. 1,57,000 cr in the financial year 2008-09. It expects a mix of 50:50 between ULIPs
and traditional products in the premium earned for FY2009-10.
Though the private life insurers have seen a decline in growth in the first half of 2009-10, there is a hope
that the last quarter of FY2009-10 will make up for the uninspiring performance so far. For the life insurance
industry, almost one-third of their business comes in this quarter. Private insurers have adopted bancassurance in a
much bigger way than the state-owned LIC. By introducing new products and going the whole hog in their
marketing efforts, the private life insurers expect to grow at 10 to 15% this fiscal. |
