NEW DELHI: Insurance companies are increasingly finding that the fulcrum of business remains the humble agent and that Indian customers prefer the plain vanilla guaranteed income life insurance product.
“We are an agent-centric firm and do a large chunk of our business through agents. India is one of the most under-insured nations and we feel that increasing the number of agents and digitally empowering them is the best way of increasing business,” said Subhasish Acharya, executive vice-president, Future Generali India Life Insurance Co Ltd.
Gross premiums written in India reached Rs 5.53 trillion with Rs 4.58 trillion from life insurance and Rs 1.51 trillion from non-life insurance. However, insurance penetration, which calculates premium as a percentage of GDP, reached just 3.69 per cent.
“More agents would push up insurance sector growth and tap the untapped potential of the sector. Typically, for every 40 agents, there is one insurance company employee supervising business. So, the amount of jobs that can be created is quite large,” said Acharya. Private insurers have over 1 million agents as of March 2019 and LIC has about 1.18 million agents. Interestingly, LIC does a little over Rs 60,000 crore worth of new business premium, whereas private insurers do about Rs 20,579 crore of new business annually.
More importantly, insurance density or the per capita insurance premia collected stood at a low of $74 in India compared to a global $567, $406 for China and $2,879 for Western Europe. “There is a lot of scope for expansion,” said Acharya. An India Brand equity Foundation study forecasts that the overall life insurance industry is expected to reach $280 billion by 2020 from $ 94.48 billion in 2018, with the life insurance industry alone growing at 12-15 per cent annually for the next three to five years.
“We have found our individual customers prefer a guaranteed plan where he or she knows how much would be paid over a period and how much would come back as guaranteed income,” said Acharya.