General insurance premium set to gross Rs1 trillion by 2015

09 February 2009

Even as the general business sentiment remains subdued in the continuing economic downturn the insurance industry is looking forward to good times with a predicted annual growth rate of premium earning growing at 20 per cent annually over the next five to six years.

The industry is expected to gross Rs1 trillion by 2015 according to an industry report released on Sunday.

A study jointly carried out by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and the United India Insurance Co, has concluded that the massive increase in premium earning from Rs.280 billion could be attributed to increased awareness of the general public about insurance.

According to the study, the earnings from premium continued to grow at a compounded annual growth rate (CAGR) of 16.6 per cent between 2000-01 and 2007-08. In 2000-01, the gross premium stood at Rs96.2 billion and stood at Rs281.38 billionin 2007-08, the study said.

"The huge market largely remains untapped in both rural and urban India as 70 percent of the population is still not touched by insurance companies," said ASSOCHAM president Sajjan Jindal while releasing the findings.

"High growth in healthcare sector will also open up health insurance potentials substantially," he added.