The Indian insurance sector is forecasted to grow rapidly in the next two years on account of aggressive marketing and introduction of wide range of insurance products by private players.
As per a study carried out by the Associated Chambers of Commerce and Industry of India (Assocham) the Indian insurance sector will see phenomenal growth in the next two years on the back of robust growth in both general and life insurance segments of private sector, as reported by Howrah News Service. Assocham also said that the sector grew nearly 175% over the last few years and would continue growing strongly in near future due to its huge potential.
Justifying the Assocham’s predictions, RNCOS in its new research report, “Booming Insurance Market in India (2008-2011)” has forecasted the Indian life and non-life insurance industries to grow at a CAGR of more than 65% and 25% respectively between 2008-09 and 2010-11.
As per a senior research analyst at RNCOS, the strong growth in the Indian insurance sector is primarily due to the intense marketing strategies and techniques adopted by the insurance companies.
Further, the private insurance companies have started focusing on untapped rural areas offering tremendous growth opportunities. This will help in raising the private sector’s share in rural market. Private insurance companies have a vast product portfolio in terms of maturity period and premium amounts, giving people a large number of alternatives to choose from as per their requirement.
In addition, the insurance companies mainly target the manufacturing sector but the service sector accounts for a very large share in the country’s GDP, offering growth opportunities to the industry. Also, private players have better market capitalization over public companies as they provide high return and aggressively market their products.
According to a Research Analyst at RNCOS, “Due to the adoption of aggressive marketing techniques by private players, the competition in the sector has further intensified, which is reducing the market share of public sector insurance companies. However, the public sector companies have widened their product range and improved their quality to match with those offered by private players, giving them long term advantage. Insurance companies will earn lots of profits with the development and expansion of the insurance industry in the country.”
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