India is on track to becoming one of the world’s largest providers of life insurance according to a study done by the Ficci and Boston Consulting Group. The rate at which the industry is progressing, the nation may become one of the 3 top life insurance companies worldwide.
The study suggests that the growth is due, in part, to the rapid industrialization of the country and booms in population. As the nation develops, more people find that they can afford insurance coverage, and so they obtain what they need.
The consulting group’s study shows that the insurance penetration in the country rose from 2.3% to 5.2% in this year alone. The number of life insurance policies that are currently active are 12 times higher than what they were just a decade ago. A study similar to that which was done by Ficci and Boston shows that the prevalence of health insurance policies grew 25 times in the same time period.
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These numbers suggest that India may be a major life insurance provider as soon as 2020. As it stands now, the insurance industry is far outstripping economic growth. In addition to being one of the top three life insurance providers, India may be home to one of the top fifteen non-life insurance markets by that time.
“While the industry has come a long way over the past decade, profitability is still a big challenge,” says Alpesh Shah, director of the Indian branch of the Ficci and Boston Consulting Group. Shah cites steep losses from private insurers as an area that needs particular attention.