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New Market Study Published: India Insurance Report Q1 2014


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2013-12-24 22:54:02 - Fast Market Research recommends "India Insurance Report Q1 2014" from Business Monitor International, now available

As of late 2013, it remains the case that the strengths and opportunities of the Indian insurance segment outweigh the weaknesses and the threats. Challenges include an idiosyncratic regulatory regime, competitive landscapes (in both major segments) that continue to be dominated by state-owned companies and constraints on the development of micro-insurance. Nevertheless, the growth in the overall economy, and the development of health insurance, should ensure that the non-life segment achieves respectable growth over the forecast period. Life insurance has clearly become a preferred conduit for the savings of those Indian households that are wealthy enough to use it.

Key Insights And Key Risks

As of late 2013, it remains the case that the strengths and opportunities of the Indian insurance segment

outweigh the weaknesses and the threats. Challenges include an idiosyncratic regulatory regime, competitive landscapes (in both major segments) that continue to be dominated by state-owned companies and constraints on the development of micro-insurance. Nevertheless, the growth in the overall economy, and the development of health insurance, should ensure that the non-life segment achieves respectable growth over the forecast period. Life insurance has clearly become a preferred conduit for the savings of those Indian households that are wealthy enough to use it.

Full Report Details at
- www.fastmr.com/prod/754553_india_insurance_report_q1_2014.aspx

The latest developments indicate that life insurers continue to deal with the clampdown on the selling of unit-linked insurance plans (ULIPs) by the Insurance Regulatory and Development Authority (IRDA) -notwithstanding that the regulator has eased the rules slightly. In part because of the move against the sales of ULIPs, attributable to a more general uncertainty over the regulator's view in relation to single-premium products and an exodus of agents from the industry, new business premiums shrunk in the year ending March 2012 (which is identified as 2011 in the tables in this report). Nevertheless, overall life premiums appear to have risen marginally - and should post single-digit growth in the year ending March 2013.

Most of the wildcards for the life segment over the longer term are positive. It remains to be seen, for instance, whether the regulator will allow life insurance companies to distribute their products through the (currently) tied agency network of Life Insurance Corporation of India (LIC) - the state-owned giant that accounts for about three-quarters of all premiums written in the segment. Reports also suggest IRDA is looking at ways to promote paperless record keeping - which should be good for the insurance companies and, probably, their customers. In October 2012, the Ministry of Finance had indicated its in-principle support for the general concept of banks establishing insurance broking subsidiaries. In early 2012, IRDA published a report that highlighted that it understands the challenges that need to be overcome if micro-insurance is to flourish in India. In late 2013, the latest news from the non-life segment indicates that premiums continue to grow rapidly.

The trend of the last three years or so, in which non-life penetration has been falling (if gradually), appears to have come to an end. It seems that the non-life companies have been able to pass onto their customers the higher costs incurred in non-motor related lines (such as higher reinsurance premiums). Within motor-related lines, the wildcard is the abolition of the pool from which compulsory motorists' third-party liability (CMTPL) claims are paid. In the short term, this has required that the insurers take substantial write-offs to recognise the increase in claims liability. However, they will have much greater scope to benefit from efficiency in claims management. Whether or not they will be able to lift rates and premiums for motor-related insurance remains to be seen. What is certain is that competition remains tough in the non-life segment, as particular companies pursue premiums and market share ahead of profitability.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at www.fastmr.com or call us at 1.800.844.8156.


Author:
Bill Thompson
e-mail
Web: www.fastmr.com
Phone: 18008448156

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