Life Insurance sector may grow at 13-14% over four years

Indian life insurance industry is likely to grow at 13-14% over the next four years and contribute 10% to total global premium income growth, according to a report by McKinsey.

Indian life insurers' total premium income is expected to reach 5, 50,000 crore by 2015. The insurance industry in Asia's third-largest economy will be one of the few major markets globally to grow at double digits during the period, the report said.

In the half-year ended September, total premium income of Indian insurers grew at 2% from a year ago. Appropriate strategic choices to adapt business models to regulatory changes can improve economic performance of top insurance players by 25-30%, the report said.

"The players who emerge as clear winners will be those who can adapt swiftly to the new paradigm by redefining their business models with careful consideration to strategic issues around agency, bancassurance, innovation, geographic footprint, and value of existing customer franchises," the report said.

Insurance firms here are currently in the process of modifying their business models, following regulatory changes that were introduced in life insurance industry in September 2010. The level of insurance protection in India, measured by sum assured to GDP ratio, is around 55% of GDP, against the developed market benchmarks of 150-250%.

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