Insurance companies on roll, target Rs.500 bn in premium

May 29th, 2008 - 9:40 pm ICT by admin  

Kolkata, May 29 (IANS) With the gross direct premium up by nearly Rs.200 billion during years 2002-08 and expected to reach Rs.500 billion in next five years, the insurance industry is on a high in the country. Speaking at an Insurance Conclave here Thursday, M. Ramadoss, chairman and managing director of the Oriental Insurance Company, said: “This underlines the huge expansion of the market after liberalisation.”

There are 27 private players in the insurance sector and the industry received Rs.21.7 billion investments in the last fiscal, he added.

“Penetration in the general insurance sector is low. Total premium of this sector is just 0.61 percent of the country’s GDP (gross domestic product),” he said.

Alpesh Shah, director and partner of Boston Consulting Group, sees great prospects for the industry. “The country is just taking off in insurance sector. Sky is the limit for the companies in this sector.”

Shah said three key features governed the growth in the sector in recent years - enhanced reach of the cover players through various channels, introduction of new products into the market and brand awareness through advertising.

“Advertisement cost of the private players has gone up three times in the recent times,” he said.

He said the country has a huge untapped market and the future is bright for general insurance companies because of emergence of upper middle class income groups empowered with better spending power. The demand for housing and automobiles have increased and the insurance needs have also gone up.

According to Ramasaamy, the insurance industry sector will concentrate on retail, micro and rural areas as future markets.

“Health insurance is likely to increase to Rs.400 billion by 2020. It is expected to grow at 35 percent in the next five years.”

National Insurance Company Ltd and The Oriental Insurance Company Ltd have set a total premium target of Rs.45 billion each for fiscal 2008-09. United India Insurance Company Ltd targets Rs.42 billion for the same period.

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