Insurance Services

Introduction

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium. It allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate.

Key Statistics

  • With 36 crore policies, India's life insurance sector is the world’s largest.
  • India ranked 10th among 147 countries in the life insurance business in FY 13, with a share of 2.03 per cent.
  • The life insurance premium market expanded at a CAGR of 16.6 per cent from US$ 11.5 billion to US$ 53.3 billion during FY 03–FY 13.
  • The non-life insurance premium market also grew at a CAGR of 15.4 per cent, from US$ 3.1 billion in FY 03 to US$ 13.1 billion in FY 13.
  • Life insurance density (total insurance premium to total population) expanded from US$ 13.4 in FY04 to US$ 42.7 in FY13 at a CAGR of 13.7 per cent.
  • The life insurance industry in the country is forecasted to increase at a compound annual growth rate (CAGR) of 12–15 per cent in the next five years.
  • The cap on foreign direct investment (FDI) also looks likely to be increased from 26 per cent to 49 per cent. The Insurance Bill which has been approved by the Government of India and will in all possibility be cleared by the Parliament is expected to increase FDI inflows to US$ 10 million in the short term.

Future Prospects

  • The total market size of the insurance sector in India was US$ 66.4 billion in FY 13. It is projected to touch US$ 350–400 billion by 2020.
  • India's insurable population is projected to touch 75 crore in 2020, with life expectancy reaching 74 years.
  • Life insurance will continue to supplement household financial savings, and is projected to be 35 per cent of total savings by the end of this decade, as against 26 per cent in 2009–10.
  • About three of every four insurance policies sold by 2020 would be in some way influenced by digital channels during the pre-purchase, purchase or renewal stages, as per a new report by Boston Consulting Group (BCG) and Google India. This report, Digital@Insurance-20X By 2020, forecasts that insurance sales from online channels will grow 20 times from present-day sales by 2020, and overall internet influenced sales will touch Rs 300,000–400,000 crore (US$ 50.02–66.70 billion).

Employability Potential

  • As insurance sector is growing with 20% rate, there will be a huge requirement of Insurance professionals in the country.
  • NSDC Report – National Skill Development Corporation has estimated the job creations of 2 Million persons in insurance and banking sector by 2021 in its latest report.
  • CII Report - The recent survey of Confederation of Indian Industries estimated that there is a need of @ 21 lakhs insurance educated employees by 2025.
  • ASSOCHEM Report on Insurance Sector – It has pointed out on employability potential in Insurance Sector in its latest report. The report has estimated manpower requirement to be 30 Lakhs by 2030.