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Emerging Trends in the Indian Life Insurance Market in 2016
The Indian Life Insurance Market
CK Prahalad, one of the world’s most influential business thinkers, came up with the concept of ‘Fortune at the Bottom of the Pyramid’ and focused on selling the products to the world’s poorest populations in order to maximize profits. It focused on finding an opportunity in a market where other competitors weren’t focusing.
For example, if the people of a region cannot afford food or clothing, this doesn’t mean they should be denied smartphones too! This concept was exploited to such an extent in India that it literally put fortune at the end of everyone’s priority list.
According to an article published in The Economic Times, about 70 million people in India suffer from some sort of life-threatening diseases. The Indian Society of Clinical Research (ICSR) also revealed that there are about 7,000 known rare diseases at present and yet 51% of the country’s total population is underinsured.
Concepts like the insurance premium calculator are unfamiliar to a large part of the population of the country. However, the latest trends in the sector promise good things for the future.
The Latest Trends
- Penetration of Smartphones: According a report published in Dazeinfo, about one-fourth of the country’s population owned a smartphone by the first quarter of 2016. The first quarter of the year saw huge demand for smartphones in India, with 45% of the total mobile phones shipped in the country being smartphones. The increasing demand of LTE capable phones is estimated to take the number of smartphone users to half a billion in less than a decade. App-based aggregators have been able to attract more customers and since it is easier to do things like calculate life insurance premiums on them, customers are likely to invest more in the market in the coming days.
- Impact of Natural Calamities: Since 2000, India has witnessed some of the deadliest disasters in its history, including the earthquake in Gujarat, tsunami in the southern parts of the country and the Uttarakhand floods. Thousands of people lost their lives in these events. This has made the citizens of India more responsible towards their family’s future security, leading to an increase in insurance policy holders in the country.
- New Distribution Markets: It is not just the investors who are learning with time but also the service providers. They are coming up with new distribution channels to reach people, such as bancassurance partnerships, corporate agents and brokers. The innovative ideas are expected to play a key role in the coming years.
What to Expect in Future?
For years, the rural parts of the country were considered backward in comparison to the urban population but by showing great adaptability to the latest technologies, they have opened doors for investment marketers as well.
More than 70% of the population lives the rural areas and remain underpenetrated. If the service providers focus on these regions, it would benefit both the rural population as well as the service providers, say experts at Bharti AXA Life Insurance. Micro insurance, which is specifically designed keeping in mind the needs of the rural people, is also gaining popularity.
Another factor that gives hope is the changed perception regarding the idea of insurance. Earlier, insurance was seen as a way to provide financial backup for the family after the demise of the policyholder, but with time, people have realized that insurance can also be used as income protection. The lump sum amount can be used to meet immediate monetary demands.
Also, it is now much easier to understand the whole process with the help of features like the life insurance premium calculator. Since the overall penetration of the insurance market in India is only 3%, it offers immense opportunities for the future.