India's insurance sector to see 500 per cent growth by 2010: Study
India 's insurance sector is poised for 500 per cent growth over the next four years and is likely to become a 60- billion-dollar industry by 2010, said a study released Sunday.
Most of India's more than one billion people are uninsured, so that insurance companies would have to pay special attention to the rural and semi-urban segments, the study by the Associated Chambers of Commerce and Industry (Assocham) said.
'A large part of rural India is still untapped due to poor distribution, large distances and high costs relative to returns,' said Assocham president Anil K Agarwal while releasing the study titled: Paper on Insurance Sector: Its Future Perspective.
He said the study had revealed that rural and semi-urban India would contribute 35 billion dollars to the Indian insurance industry by 2010.
There were immense opportunities for insurance companies to provide cover for the risks associated with a primarily agrarian economy, the study said. But the insurance companies would have to understand the requirements of India's villagers, their peculiar needs and occupational structures, it added.
The insurance needed to be packaged in such a way that it appeared an acceptable and affordable investment to the rural people.
The study added that the urban sector insurance was estimated to reach 25 billion dollars by 2010, life insurance 15 billion and non- life insurance 10 billion dollars.
India has a cap of 26 per cent on foreign direct investment in the insurance sector. In a recent interview in the German business newspaper Handelsblatt, Indian Prime Minister Manmohan Singh said his government intends to raise the cap to 49 per cent and allow 'greater role' to foreign banks step-by-step.
But he acknowledged that the Left parties, extending crucial support to his United Progressive Alliance government, were against the move and it would take time to convince them.