Tuesday, September 17, 2019
News

Insurance digital premiums a $37 bn market by 2025: JM Fin

   SocialTwist Tell-a-Friend    Print this Page   COMMENT

New Delhi | Wednesday, 2019 2:15:05 AM IST
Online insurance sales for new business, which are in a nascent stage in the country, are fast catching up and are likely to grow at a CAGR of 13 per cent to become a Rs 2.6 trillion ($37 billion) opportunity by 2025, according to a recent report by JM Financial.

The report said the market size of online insurance business in India is currently pegged at Rs 1.1 trillion ($15 billion). While a major proportion of online sales will come from life insurance renewal premiums (estimated at 94 per cent in FY19), digital sales of non-life insurance policies are gaining traction and may impact volumes more than the value, as ticket sizes are relatively small, the report points out.

Interestingly, the share of life insurance (renewal) premium in the digital premium space will come down to 85 per cent in FY25 from 94 per cent in FY19 while the share of motor insurance will go up to 5 per cent from 3 per cent, life - new business premium (NBP) to 4 per cent from 3 per cent, others and health insurance will go up to 3 per cent and 2 per cent, respectively from 1 per cent each between FY19 and FY25, the study estimates.

With insurance market moving online form offline, the commission generated by on-line insurance aggregators are expected to touch Rs 38.5 billion by 2025, according to the research report by JM Financial.

The main beneficiaries of the digital shift in the insurance premium space will be the aggregators and banks as the commissions generated for selling insurance products on-line will grow substantially with the growth in volume.

The report estimates that the market for commissions will post a CAGR of 34 per cent from an estimated Rs 8.4 billion ($120 million) in FY19 to $690 million by FY25. This growth is likely to come from the increasing share of online policy distribution by web aggregators, taking the web aggregator market from an estimated Rs 4.5bn ($65 million) in FY19 to Rs 38.5 billion ($550 million) by FY25F growing at a CAGR of 43 per cent.

The insurance under-penetration in India gives immense potential for the digital premium market. Globally, India had one of the highest insurance 'protection gap' as of 2014 as well as amongst the lowest insurance density (in 2018) in both the life and non-life sectors - at $54 and $18, respectively while the world average is $370 and $312, respectively.

While life insurance penetration in India at 2.7 per cent of GDP (as of 2018) is lower than global average (3.3 per cent of GDP), it's better than that of China and Brazil. However, penetration is particularly low in the non-life insurance segment which stands at 1 per cent whereas the world average is 2.8 per cent of GDP.

--IANS ana/sn/vd

( 482 Words)

2019-09-10-20:14:04 (IANS)

 
  LATEST COMMENTS ()
POST YOUR COMMENT
Comments Not Available
 
POST YOUR COMMENT
 
 
TRENDING TOPICS
 
 
CITY NEWS
MORE CITIES
 
 
 
MORE BUSINESS NEWS
Wipro ties up with German i4.0 for digit...
Govt nudges Apple Inc to increase Indian...
Delhi EV move may help save Rs 6,000 cr ...
Sensex, Nifty fall with attack on Saudi ...
August wholesale inflation unchanged fro...
Top Northern Command officers meet Finan...
More...
 
INDIA WORLD ASIA
Veteran journalist Ajay Singh President'...
Dalit BJP MP denied entry to a temple in...
BJP leaders extend birthday greetings to...
Ram Janmabhoomi Nyas based on malicious ...
Sonia considering Tanwar, Nayak as Delhi...
Stalin takes dig at purohits, backs 'ref...
More...    
 
 Top Stories
Shehbaz Sharif meets Nawaz in jail... 
Christian Navarro: Excited to see w... 
Garware CMD seeks fresh term amid c... 
Blast hits President Ghani's campai... 
J-K's cultural, religious monuments... 
52-year-old man reunited with famil... 
Delhi: JW Marriott Aerocity paves w... 
Former AP Speaker's suicide case is...