Mr.M Ravichandran, President of Tata AIG General Insurance, has good news for all insurance buyers in India. According to him, the national insurance market will grow rapidly in 2016 because of robust growth in the economy and new initiatives launched by the Government. He believes the insurance market will grow at around 12% to 13% for the ongoing quarterly (from the previous year) and it would hit 15% for the next financial year.
Mr. Ravichandran firmly agrees to other industry experts that Prime Minister Narendra Modi’s ‘Make in India’ program will be a huge boost for the insurance industry. He also picked out other factors like more investment in the infrastructure sector, increased energy consumption, and smart city programs to further speed up the insurance industry growth in 2016.
Positive sentiment on the country’s growth is expected to attract more revenues (from foreign and local people) to the travel and tourism industry, which will directly impact the travel insurance growth, he said.
The revised salaries and perks for government employees are likely to encourage more people to invest in two wheelers and four wheelers as that remain one of the top choices for families in India. In turn, this is likely to benefit the auto insurance industry.
In addition to the government schemes, there is a new breed of health and fitness gadgets that are being introduced in the Indian market to benefit the healthcare industry. Have you heard of wearable technology insurance? Wearable technology encompasses gadgets that help you to keep track of your heart rate, determine the number of calories burnt during a particular activity, sleeping time, at what time you should take your pills when to meet the doctor and more. By keeping track of your health and fitness, you exactly know what insurance you need and what you don’t need. This way, you save money by purchasing only relevant insurance plans that are appropriate for your needs. Hmm, the world is getting smarter indeed!
Also, the fact that the Foreign Direct Investment (FDI) limit has been elevated to 49% and with increasing scope to do business in India, who knows, we could even see a good number of foreigners enter the local market to launch multiple initiatives.
Mr. K G Krishnamoorthy Rao, MD, and CEO of Future Generali India Insurance felt the ‘Make in India’ program along with a series of other initiatives being undertaken by the Government would benefit the manufacturing industry, which would drive the engineering sector, and thus increase the demand for motor insurance. However, Mr.Rao also noted that the demand for general insurance might take a hit in the coming months because of rising goods and commodities prices. The government has to take serious steps to control the inflating prices, he said.
On the other hand, ICICI Lombard published a report titled “General Insurance: Trends and Outlook for 2016” in which it highlighted that factors like unexpected events and accidents and increased awareness among people would benefit the health insurance industry. Mr.Sanjay Datta, a chief member of the company’s insurance division, was optimistic that more people will start banking on reliable insurance providers to meet unexpected health care expenses.
As far as the motor industry is concerned, the report suggested that we could see a change in consumer behavior with an increasing number of buyers opting for expensive vehicles with enhanced features and design. This is also one reason why cab services such as Uber and Ola have become a huge hit in the Indian market. Now with Ola adding premium cabs like Jaguar to its kitty just days ago, we could well see people liking the experience and investing in such hi-tech cars in the near future.
The taxi market is growing at well over 20% annually and newly launched self-drive services are only expected to boost the taxi market in the coming months. All of that is likely to benefit the motor insurance industry as car owners opt to buy them to secure their cars from accidents and damages.
The ICICI Lombard also revealed that out of the 32.9 million four-wheelers registered in the country, about 9.5 million still remain uninsured. What’s even more surprising is that two-wheelers that contribute to 70% of the entire vehicles in India, is lagging behind. Almost 75% of bikes and scooters are either yet to renew their insurance or have no insurance.
Final Words
Considering the above factors, it looks very obvious that the demand for insurance is expected to touch new highs, and so is their need. If you are running without insurance, make sure you get one soon!
