India's accident and health insurance market is expected to continue its growth trend and forecasted to grow by 22% over the next 5 years, according to the BRICdata report.
The expected growth and a decrease in capital requirements will create an attractive market for new entrants into the market, the report added.
Though currently public-sector insurance providers hold a grip over the market, it will not stop private players from making inroads into the market share in the forecast period of 2011-2015.
The opening up of new distribution channels is a major driver that could spike the total volume of new policies exponentially, the report said.
The BRICdata report found that four public companies together account for more than half of the market share hold in the personal accident and health insurance segment, and their sway over the market dominance will be under threat from private companies in the forecast period.
The report indicated the major barrier for new entrants will, however, be brand recognition, so it is recommended that they work towards forming an alliance with stronger brands, both domestic and overseas.
The rapid growth in the Indian personal accident and health insurance market is because of increasing healthcare expenditure, economic prosperity and changing lifestyle patterns.
In addition to entry of private accident and health insurers, reaching out to more people by insurance majors and banks to second- and third-tier cities in India will lead to an increase in accident and health insurance policy volumes in India during 2011-2015.
Low awareness about personal accident and health insurance, ineffective penetration in rural areas, no cover for many common ailments and the lacklustre distribution model at the present in the country are among the key challenges for insurers.
The report recommends that there is a need to comprehend the demand-side dynamics, key market trends and growth opportunities that lie in the Indian personal accident and health insurance industry.
It further said the competitive forces should be assessed in the personal accident and health insurance industry, along with the reinsurance segment.
Importantly, there is a need to identify the growth opportunities and industry forces operating within key product categories in order to tap them.
In order to achieve this, insights should be gathered into key regulations governing the Indian insurance industry and its impact on companies and what the future holds out for the industry, according to the report.
The full report ‘Personal Accident and Health Insurance in India, Key Trends and Opportunities to 2015’ is available from BRICdata. Click here for more details.