Thank you for detailed post on insurance sector. It is very useful for investors to get to grips quickly on the sector.
I refer to your comment below in your post#6
I came across this interview of Sridhar by Enam which has a contrarian view on life insurance opportunity in India:
… that the penetration of life insurance adjusted for per capita keep in mind that these are actually financial products. You cannot say we are 2.5-3% penetration and China is also 3%. Their per capita is four times larger than us. From a penetration standpoint also, this is one of the only product where India is over penetrated forex per capita. And my last point on life insurance is that there are roughly 300 million life insurance policies outstanding in the market as we speak, the total number of households are roughly 300 million and if you assume only half of them are insurable you are already talking of two life insurance policies per household. Whichever way I cut it, it looks over penetrated to me.
Read more at:
Sridhar Sivaram on sectors to buy into and avoid with a five-year view - The Economic Times
Few additional inferences I could draw while reading through various reports
- Insurance penetration has declined over last 10 years (4.5% of GDP in FY09 to ~3% of GDP now) - which has been led by changes around ULIP fee structure
- As an investment product, life insurance is well penetrated - however protection gap remains huge and can be a bigger value driver for the future.
Looking at these data points, it would be interesting to get your perspective on following questions -
- Is the life insurance opportunity already well penetrated?
- Which products, according to you, would be key driver of future growth.
- How do you think protection is going to shape up in India
Maybe you can address this with a post on opportunity / outlook for life insurance sector in India.
Thanks!