2008 will see a lot more players join the life insurance party. Almost 18-20 new entrants are expected in another few months, and the subsequent competition is expected to double the life insurance business to Rs 3,59,000 crore in three years' time.
Innovative products will be on offer, and a higher rate of penetration will be achieved. Growth prospects are expected to be strong.
Indian is the the fifth largest insurance market in Asia, and almost 85 per cent of the insurance business conducted in the country has to do with life. Rising income levels, along with a growing middle class with smaller family sizes are targets of most insurance companies.
• Check out our Yearender Special
In their explanation of the ensuing growth in the life insurance industry, analysts from ICICI Securities and Fox Pitt Kelton point out: "We expect the coming years to be an exciting time for the Indian life insurance market, a time marked by rapid growth as insurers vie for market share. However, we alsoexpect to see further polarization of players. The larger players, being supported by stronger and more aggressive local promoters, will get larger, while the smaller ones will drop out or become niche players".
Premium collections are expected to grow at 20 per cent per annum over the next few years, with the private sector expected to march ahead with 40-50 per cent growth.
"Each private sector player is likely to experience a slightly different premium growth depending on its stated strategy. For example, we believe Reliance Life will show very strong growth given its highly aggressive expansion plan, whereas HDFC Standard Life's growth momentum is likely to be weaker given its focus on profitability. In our estimation of goodwill, we expect growth to slow eventually to 5 per cent over the subsequent 20 years", the analysts said.
Innovative products will be on offer, and a higher rate of penetration will be achieved. Growth prospects are expected to be strong.
Indian is the the fifth largest insurance market in Asia, and almost 85 per cent of the insurance business conducted in the country has to do with life. Rising income levels, along with a growing middle class with smaller family sizes are targets of most insurance companies.
• Check out our Yearender Special
In their explanation of the ensuing growth in the life insurance industry, analysts from ICICI Securities and Fox Pitt Kelton point out: "We expect the coming years to be an exciting time for the Indian life insurance market, a time marked by rapid growth as insurers vie for market share. However, we alsoexpect to see further polarization of players. The larger players, being supported by stronger and more aggressive local promoters, will get larger, while the smaller ones will drop out or become niche players".
Premium collections are expected to grow at 20 per cent per annum over the next few years, with the private sector expected to march ahead with 40-50 per cent growth.
"Each private sector player is likely to experience a slightly different premium growth depending on its stated strategy. For example, we believe Reliance Life will show very strong growth given its highly aggressive expansion plan, whereas HDFC Standard Life's growth momentum is likely to be weaker given its focus on profitability. In our estimation of goodwill, we expect growth to slow eventually to 5 per cent over the subsequent 20 years", the analysts said.
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