A recently published report by Google India and Boston Consultancy Group (BCG) forecasts that online insurance industry in India will become 20 times its current value and will cross Rs 20,000 crore by 2020.
The report titled “Digital@Insurance-20X By2020” was released yesterday in Mumbai.
At present, online insurance market in India is pegged at Rs 700 crore, out of which Life Insurance related transactions account for Rs 300 crore, whereas non-life insurance related plans such as Motor Insurance accounts for Rs 250 crore; Health and Travel Insurance makes up Rs 150 crore. In the coming 6 years, online transactions and activations of both life and non-life insurance will become 20 times it’s current value.
Such massive explosion in this industry will be driven by adoption of online services by more and more Indians and the ease of use and plan selection offered by websites catering to this segment. Right now, 200 million Indians are online which will swell to 360 million by 2016 and 500 million+ by 2020 as per the estimates of this report.
Alpesh Shah, BCG senior partner and the author of the report said, “The digital adoption could result in potential savings of 15-20 per cent of total costs in the case of life insurance and 20-30 per cent in the case of non-life, thereby showing the path towards profitability for the industry”.
As per the report, online life insurance sector will grow at a compound rate of 3-5% per annum till 2020, which will make it Rs 3500-Rs 6000 crore industry. Whereas online non-life insurance market will grow at a rate of 15-20% per annum till 2020, making it Rs 11,500 crore – Rs 15,000 crore industry.
Overall, digital insurance industry will touch Rs 15,000 crore – Rs 20,000 crore volume, growing 20 times of its current market value.
This finding of the report will give a huge boost to the overall ecommerce and online marketing industry in India, as more and more players are entering the segment to lure ever increasing Indians to the charms of the web.
With 900 million mobile users, 200 million Internet users and 95 million Facebook users, Indian is right now on a threshold of massive explosion in Internet based transactions and shopping.
Vikas Agnihotri, Industry Director, BFSI, Travel Google India said, “Today, the overall influence of internet on insurance product purchase in India is already 6x and growing rapidly. Insurance companies in India are still lagging behind the consumers and have not invested enough to create digital assets to engage the mature consumers online. The biggest challenge for the industry would be to think big.”
Online renewals of insurance policies (offline and online both) is another segment which will encounter massive boom in coming years. As per the report, 10-15% of all renewals of existing insurance policies is anyways coming in via online route; which makes digital renewals market to the tune of Rs 15,000 crore – Rs 20,000 crore / year.
By 2020, online renewal industry will be more evolved with better penetration which will make it grow 30-35% of the current value, making it Rs 1,75,000 crore – Rs 3,00,000 crore industry.
[…] Travel insurance in India is Rs 4000 crore market as per 2013-14, and is growing at a rate of 20-25% annually. Overall, online insurance industry is Rs 700 crore market right now, out of which Health and Travel insurance is worth Rs 150 crore (insurance offered by MakeMyTrip; Yatra; ClearTrip are part of this). It is expected that by 2020, online insurance will touch Rs 20 lakh crore by 2020. […]