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Lic Role in National Building

  • Date Submitted: 08/31/2016 11:23 PM
  • Flesch-Kincaid Score: 45.8 
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Private players in the life insurance business are growing at a scorching pace. Within three years of their inception, they have seized about 14 per cent of the market.

Compare this to new generation private-sector banks, which took nine years for 20 per cent share in the India [ Images ]n banking industry. And after seven years in the industry, in 2000, private mutual funds accounted for just 9 per cent of a market that had been dominated by the Unit Trust of India.

There's another dimension to the insurance numbers game. While the private insurance companies have attained 13 to 14 per cent share of the overall insurance market, their share in the key metros (Mumbai [ Images ] and Delhi [ Images ]) is as high as 30 to 40 per cent.

"We have to struggle to complete a deal in the metros now, because policyholders are comparing products and asking for better deals," says S B Mathur, chairman of the Life Insurance Corporation of India.

Private insurance companies are essentially joint ventures with global insurance companies holding a maximum of 26 per cent stake. The foreign partners are investing heavily in the Indian market and, thereby, driving sales, because they see India emerging as one of the biggest markets in the Asian region.

"India will become the biggest market for us in the next three to four years," predicts Dan Bardin, Prudential Corporation Asia managing director south Asia and greater China.

Private players have certainly done their bit to increase the penetration levels of insurance, mainly by creating alternative distribution channels--such as associations with banks, brokers and corporate agents.

"Our bancassurance channel--with tie-ups with four banks--contributes almost 70 per cent of our total sales," says Aviva [ Get Quote ] CEO Stuart Purdy.

OM Kotak Mahindra Life, which is ranked eighth among private players, is also leaning towards alternative distribution channels that will contribute to 45 per cent of...


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