General Insurance market to reach Rs 90000 crore by 2015

Driven by an increase in demand, by the year 2015, non-life insurance or general insurance market is estimated to grow at over 18% to Rs 90,000 crore from the current level of Rs 47,000 crore, Associated Chambers of Commerce and Industry of India (ASSOCHAM) said in its press release.

India will be one of the fastest growing markets in Asia and globally – next only to China among major markets.

Motor insurance will continue to remain the largest category, contributing over 40 per cent of industry premiums. India will become the third largest car market globally by 2020 with over 70 lakh cars sold annually, driving growth in motor insurance.

On the other hand, total expenditure on healthcare will be Rs 20 lakh crore, creating significant opportunities for coverage through health insurance.

D S Rawat, Secretary General, ASSOCHAM said, “The health insurance segment will grow the fastest and account for close to 30 per cent of total industry premiums by 2015.”

Within health insurance, government sponsored health schemes will grow the fastest while retail will emerge as the largest opportunity, he added.

India’s infrastructure expenditure over the next five years is likely to be Rs 47 lakh crore, creating opportunities for insuring these projects. Engineering insurance coverage for new projects will be an important area of growth, leading to opportunities in segments like commercial lines.

With small and medium enterprises growing at 20 to 22 per cent, the non-life insurance market will be particularly attractive for players who can bring in skills and more innovative practices to capture the opportunities.

An increase in penetration rate from 30 per cent to some 50 per cent in 2014-15 across large (about 10,000 customers with premiums in the range of Rs 10 lakh to 25 lakh), medium (80,000 customers with Rs 1 lakh to 10 lakh premiums) and small (102 lakh customers with less than Rs 1 lakh premiums) bases in the SME segment will drive a 2.5 times increase in premiums.

There is already evidence of increasing competition with the number of companies increasing from 16 in 2007 to 24 this year and further four to five in the pipeline, said ASSOCHAM.