Total premium of insurance industry may reach Rs 26 lakh crore by 2020

Total premium of the insurance industry in India (life and non-life combined) is projected to reach Rs 26 lakh crore by 2020, according to a report.

 “The total premium of the overall insurance industry is projected to touch the Rs 26 lakh-crore mark (life and non-life combined).

This transition towards Vision 2020 has to be supported by an equally significant rise in the number of intermediaries involved in the distribution of insurance, mainly individual agents and corporate agencies (including banks),” Distribution Disrupted — a report by Confederation of Indian Industry (CII) and KPMG in India stated.

 “We can expect the current gross direct premium of Rs 3,28,101 crore as reported in FY15 to touch Rs 1,700,000 crore by FY20. Out of this, Rs 1,700,000 crore, individual agents are expected to contribute Rs 5,95,000 crore while corporate agents are likely to contribute Rs 1,53,000 crore,” the report added.

 As per the report, GDP, untapped household savings and dormant/ quiescent HNI wealth in B-15 cities offer new business potential for financial services companies. According to industry experts and market analysts, the insurance industry in India will witness a record growth in terms of market size, penetration rates, new business income and similar growth statistics by 2020.

 The report states that the mutual fund industry needs to expand at a rapid pace and distributor count has to increase significantly. “To achieve the expected assets under management growth rate, a three to five fold increase in number of distributors is a critical success factor since the industry is challenged with low active distributor base,” the report stated.