Private firms to lead growth of insurance sector: Assocham

Aggressive marketing by the new private sector insurers could lead to India's insurance sector reach growing four-fold to Rs2 lakh crore from the Rs50,000 crore at present in the next two years, says a new report by Assocham, Insurance Sector Futuristic Growth'.

The report has forecast a growth of 140 per cent for private inurance companies against 35-40 per cent for state-owned insurers.

The report credits the aggressive marketing by the new private sector companies that were established after the sector was oprnrd to the private sector. It noted that competition from these new firms had brought down the market share of government owned companies from 97.5 per cent to to 70 per cent in the last five years.

The state owned insurance companies have limited number of policies to offer to their subscribers unlike private insurance companies, who also offered more competitive premium and policy tenures than government insurance firms.

Assocham president Sajjan Jindal said, private insurers had also started penetrating rural markets and would stimulate demand in areas that are currently not served at all.

This offers immense expansion opportunities for the entire insurance sector.