Insurance sector to hit Rs 2,00,000 cr by 2010

Riding on the back of new players and increasing penetration, the insurance sector is expected to cross the Rs 2,00,000-crore mark in business by 2010, according to a study by industry body Assocham.

At present, the size of the insurance sector is estimated at Rs 50,000 crore, which has seen a compound annual growth rate (CAGR) of around 175 per cent in the last few years, the study named Insurance in the Next Two Years stated.

The insurance sector, both life and non-life, is likely to grow by over 200 per cent and private insurers are expected to achieve a growth rate of 140 per cent as a result of aggressive marketing technique, it said. The growth of state-owned insurance companies is likely to be 35-40 per cent.

"On account of intense marketing strategies adopted by private insurance players, the market share of state-owned insurance companies such as GIC, LIC and others has come down to 70 per cent in the last 4-5 years from over 97 per cent," Assocham President Venugopal Dhoot said.

The study said private insurance companies would further adopt aggressive marketing techniques. Despite the regulation, private players are offering a 35 per cent rate of return to its policyholders against 20 per cent by public-sector insurers.

This factor is mainly responsible for a hike in the private insurance market share that will grow further, it said.