Life Insurance Industry to double in five years

According to a market study done by McKinsey, the life insurance market can easily touch $100 billion by 2012. This is easily possible if the life insurance companies bring in more innovative products.

The report titled, 'India Insurance 2012: Fortune Favours the Bold' shows that a higher per capita income will drive the demand for insurance products.

The report estimates that by 2012, Indian household will be paying premia of up to Rs 4,100 from the current Rs 1,300.

The ratio of life insurance premium to India's GDP is around 4 per cent as against 6-9 per cent in the developed countries. The ratio is expected to rise to 6.2 per cent by 2012.

The report also says that less than one third of the agents of all the life insurance companies in India meets the training and sales standards of their respective companies. Indians seem to prefer putting their money in insurance rather than putting it in to any other investment vehicle, for the purpose of investment as well as tax planning.

By 2012, about 40 per cent of the urban population may have some form of life insurance cover as against 30 per cent currently. In rural areas, it could touch 35 per cent as against 25 per cent.