The dawn of a new year is upon us, and as usual, the contemplation of the year that was, and hopes for the year that will be are in full swing. When considering the competitive, thus lucrative Indian life insurance market, the emerging trends for 2015 are very encouraging. A latest prediction notes that India’s overall insurance sector is poised to grow at a phenomenal rate in 2015, even eclipsing the country’s much commented upon economic growth rate. Insurance in India isn’t a new fad- big multinational insurance companies have been here since a long while, as well as reputed Indian conglomerates have jumped into the fray by opening their own general insurance concerns. In particular, the erstwhile low penetration rates that are attributed to the Indian life insurance sector will be replaced by brisk business opportunities, improved awareness and ready adoption.
Key Life Insurance Indicators in 2015
- Currently, India is the world’s 12th largest life insurance market, while holding the distinction of being the 4th largest in the Asia-Pacific region. In 2015, the aggressive growth in this sector will reflect in India’s move up the scale, overtaking South Korea to emerge as the 3rd largest life insurance market in the Asia-Pacific region, right on the heels of leaders China and Japan.
- The factors contributing to this flash growth include an increment in the country’s population, expected tax benefits, the rise of India’s middle class population with their enhanced disposable incomes, heightened awareness for the need for life insurance and most importantly, the predicted robust economic growth as expected under the new regime at the centre.
- Life insurance companies are constantly adapting and listening to what the Indian customer wants. The common request for a long time has been the need for insurance products that offer assured income in the form of annuities, a request that has already been implemented upon by the said life insurance companies. These measures are expected to generate a new-found interest in life insurance products, especially amongst India’s youth brigade.
- New, innovative products and methodologies that deviate away from the core life insurance objective to include other beneficial features are bound to be the icing on a very lucrative cake in 2015. Distribution channels like Bancassurance are bound to rule the roost.
- Economic, political, social and demographic conditions are expected to contribute towards very open and confidence building market conditions wherein the existing and incoming life insurance companies are expected to thrive and flourish. The impetus in terms of the Foreign Direct Investment (FDI) is going to give the sector extra wings to confidently achieve this goal.
Things to Watch Out in 2015
- Key growth segments within the Indian life insurance sector- little initiatives that contribute to the overall cause.
- IRDA and its proposal to increment the FDI in the private insurance companies from the current 26% to a more substantial 49%. This will help these companies improve their market penetration levels, especially in the Indian rural sector that is largely untapped at this point.
- The fundamental improvements in the government rules and regulations that govern the Indian life insurance sector.
- The constant realignments and innovations inside the sector itself, as quick responses to customer demands, changing economic conditions, product strategy and response to competition from fellow life insurance companies.
How Are Life Insurance Companies Adapting?
- Conscious of Costs (Work with less, Make every rupee run a mile) – The recent economic burnouts have been a stern teacher and the Indian life insurance companies are finally seeing the bigger picture. Most of these companies have now posted fresh adherence to the quality that tags alongside their operational and promotional spends, thus, 2015 is going to be all about working with less yet driving great quality out of it.
- Improving and Maintaining the Confidence of Stakeholders- Whilst the changing political scenarios in India have filled most investors with a renewed confidence as far as investing in this land of opportunities goes, 2015 will witness a ramped up interest amongst life insurance companies to repay the faith that has been bestowed upon them. With the prospect of increased FDI, it pays to play a good host and protégé.
- Customer Reach (Going where no life insurance company has gone before)- 2015 is going to be all about finding new customers and holding dearly onto the existing patrons by offering them amazing service and an improved arsenal of products. With improved penetration levels, the battle lines will be drawn and self-promotion will hit a frenzied level.
Thus, the incoming year is bringing in a truckload of opportunities and benefits- both for the expectant Indian life insurance companies and the public at large that the former wishes to serve. While improved awareness on the part of the common man will be a decisive factor- the bottom line remains that 2015 will likely be listed as a bumper year in the annals of the Indian life insurance sector.