Indian life insurance growth story still intact

A recent survey of the senior executives in the Indian life insurance industry carried out by Milliman suggests that the long-term growth story of the sector is still intact. Despite a sharp fall in new business volumes for the private sector players during FY10-11 following the recent changes to unit- linked guidelines, the survey suggests that senior executives expect a turnaround during FY11-12.

 

The survey offers some additional insights:
It is interesting to note that even after 10 years of the existence of private sector players, many respondents suggest that the industry is still short of experienced professionals / management.

 

Despite the current interest in securing bancassurance distribution, many respondents still believe that agency channel (albeit in an ‘improved’ form) will be the major distribution channel over the next ten years.

Respondents expect the levels of profitability (defined as the value of new business divided by annualised new business premium) to stabilize in the range of 10% to 20%. For an emerging market such as India, this level of profitability is much lower than the margins being achieved in several other countries in Asia Pacific. Perhaps this suggests that Indian companies will aim to tackle their acquisition expense overrun problems to enhance profitability?

To view the detailed report please click here