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An Associated Chambers of Commerce & Industry (ASSOCHAM) study projected a 500% growth in value of insurance policies from USD 10 billion to USD 60 billion by 2010 with rural and semi-urban communities contributing to most of the growth.
The study predicted that total insurance from rural and semi-urban markets will total USD 35 billion with USD 20 billion in life policies and USD 15 in non-life policies. The urban market is expected to taper off at USD 25 billion with USD 15 billion in life and USD 10 billion in non-life policies.
| Insurance
Projections |
| Urban Life |
15 |
| Urban Non-Life |
10 |
| Rural & Semi
Urban Life |
20 |
| Rural & Semi
Urban Non Life |
15 |
|
Amount in
billons of US Dollar |
|
Insurance
Percentage of GDP
|
| India |
1.8 |
| USA |
5.2 |
| United Kingdom |
6.5 |
| South Korea |
8 |
India’s insurance premium in relation to its Gross Domestic Product was a paltry 1.8% compared to the US rate of 5.2%, UK of 6.5% and South Korea of 8%. Insurance Percentage of GDP
ASSOCHAM said that the urban market is well serviced and most growth will happen from the rural areas debunking political notions that rural India cannot or will not venture into insurance because of costs and lack of awareness. The
Andhra
Pradesh Government is planning to launch an election-year sort of program that will insure farmers with the Government paying 2/3rd of the policy amount. It is not clear how the Government will pay for it or how it plans to distinguish between needy and non-needy farmers.
Of the 124 million rural households, 20% of farmers owned a special Kissan (Farmer) Credit Card and those 25 million cardholders will be a great target market to
target.
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