What does this mean for the consumer?
Insurance companies will introduce more term policies. These policies provide protection for a specified time period, and do not offer any returns. These will cover simple requirements of the insurance for the investor. In effect term policies translates into low premium outgo, which frees the capital for investment into other investment vehicles, which offer better returns.
Currently term policies constitute only1% of the total number of policies issued by LIC, while the global average is 15-20 per cent. Apart from the plain vanilla policies, new entrants will also offer consumers a choice of products with low premiums.
Endowment policies will change too. The insurer, in line with his precise risk appetite, will be able to invest in a variety of indices or sector specific where in the returns would be higher. Instead of current fixed returns schemes insurance companies will issue unit linked schemes, indexed funds, or even real estate funds.
Another opportunity is offered by a pension contract. Here the options offered could be indexed annuity, immediate annuity or a deferred annuity.
The scope of new products is also immense in the non-life segment. Companies would offer products for niche segment, like disability products, workers compensation insurance, renter’s coverage and employment practices liability insurance.
The general insurance industry is expected to grow at the rate of 25% per annum. Scared of new entries in the insurance sector, GIC has started offering new policies like Raj Rajeshwari. It covers disability from accidents, the accidental death of the spouse and legal expenses resulting from the divorce
Channels
Insurance companies will also get savvy in distribution. Enhanced marketing thus will be crucial. Already many companies have full operation capabilities over a 12-hour period. Facilities such as customer service center are already into 24-hour mode. These will provide services such as motor vehicle recovery. Technology will also play a important role on the market. Effects of technologies are discUS$ed in another section.
Rural areas
According to Malhotra committee report the penetration of insurance in India is around 22%. This indicates that a vast majority of rural population is not covered. Though GIC offers many products for this segment like, crop policy, silk worm policy etc, But due to poverty majority of the population cannot offered to get insured. Despite this, new entrants are hopeful of covering the vast tract of rural masses
Insurance companies will introduce more term policies. These policies provide protection for a specified time period, and do not offer any returns. These will cover simple requirements of the insurance for the investor. In effect term policies translates into low premium outgo, which frees the capital for investment into other investment vehicles, which offer better returns.
Currently term policies constitute only1% of the total number of policies issued by LIC, while the global average is 15-20 per cent. Apart from the plain vanilla policies, new entrants will also offer consumers a choice of products with low premiums.
Endowment policies will change too. The insurer, in line with his precise risk appetite, will be able to invest in a variety of indices or sector specific where in the returns would be higher. Instead of current fixed returns schemes insurance companies will issue unit linked schemes, indexed funds, or even real estate funds.
Another opportunity is offered by a pension contract. Here the options offered could be indexed annuity, immediate annuity or a deferred annuity.
The scope of new products is also immense in the non-life segment. Companies would offer products for niche segment, like disability products, workers compensation insurance, renter’s coverage and employment practices liability insurance.
The general insurance industry is expected to grow at the rate of 25% per annum. Scared of new entries in the insurance sector, GIC has started offering new policies like Raj Rajeshwari. It covers disability from accidents, the accidental death of the spouse and legal expenses resulting from the divorce
Channels
Insurance companies will also get savvy in distribution. Enhanced marketing thus will be crucial. Already many companies have full operation capabilities over a 12-hour period. Facilities such as customer service center are already into 24-hour mode. These will provide services such as motor vehicle recovery. Technology will also play a important role on the market. Effects of technologies are discUS$ed in another section.
Rural areas
According to Malhotra committee report the penetration of insurance in India is around 22%. This indicates that a vast majority of rural population is not covered. Though GIC offers many products for this segment like, crop policy, silk worm policy etc, But due to poverty majority of the population cannot offered to get insured. Despite this, new entrants are hopeful of covering the vast tract of rural masses