5-year forecast for Insurance IndustryET Edge
We recently caught up with few of our featured speakers at the Economic Times Insurance Summit 2019 and discussed their thoughts around the Insurance Industry. Read on to know their viewpoints.
RM Vishaka: India is growing rapidly with a prediction to have more people moving out of BPL, with government initiatives. This is definitely a new and growing market segment. The existing low insurance penetration, combined with the growing market will require an inclusive and considered approach to offer suitable products to respective customer segments. We are bullish on the life insurance industry, which has tremendous potential for market differentiation and technology disruption. The regulatory sandbox presents immense possibilities to pilot innovative ideas to expand and tap into the market
Rakesh Jain: The Indian general insurance sector is at a relatively nascent stage compared to other developed markets. Since India is one of the lowest penetrated markets in the world in terms of insurance (at 0.97% in FY 19), we see a massive untapped opportunity for the non-life insurance sector. Growing around 15-18% year on year for next decade or two, the growth for General Insurance will be primarily driven by Health & Motor insurance, followed by Home and property insurance.
IRDAI’s constant regulatory efforts are also leading to improved coverage, more simplicity in the fine print, faster processing & lesser rejection of claims. Digital transformation in general insurance has ensured relevant and accurate information for both insurers and consumers. From bite-sized ‘sachet’ insurance policies, multi-year coverage schemes, to AI-powered bots for 24×7 support, we will increasingly see more personalisation for customers. The industry is galore with positive changes that make it more accessible, simple and engaging for customers.
Warendra Sinha: The penetration of the non-life insurance industry in India is abysmally low at 0.94% as of 2019. So there is a huge potential for growth in the coming years. There have been several reports that the non-life insurance industry will continue with the double-digit growth in the next five years. The key driving factors are favourable demographics such as growing middle class with a rise in income levels and an increase in young insurable population. Technology is another factor that will propel growth by ensuring insurance protection availability, anytime and anywhere.
In the next five years, the insurance industry will be very innovative in launching short term products popularly known as bite-size products. For example, there are a set of customers who prefer accident insurance due to a fracture or ligament tear, etc. while in a gymnasium or while travelling in a taxi or railway for the distance travelled etc. These developments will enlarge the scope of insurance and lead to a new form of easy-to-understand insurance covers. The increasing penetration of smartphone and robust internet infrastructure will play a role in taking insurance to a customer’s fingertips.