Life Insurance Marketing in India (A): The Changing Advertising and Promotion Norms

R N Jha, LIC's former Executive Director commented in his book, 'Insurance in India,' "Insurance coverage has been extended only to about 25% of the insurable population in 40 years," indicating the huge uncovered market potential in the country. It was reported that per capita insurance premium¹ in developed countries was much higher as compared to India. In 1999, per capita insurance premium in India was only $8 while it was $4,800 in Japan, $1000 in Republic of Korea, $887 in Singapore, $823 in Hong Kong and $144 in Malaysia. In the world market, in terms of gross insurance premium also, India's share was only 0.3%, though population wise it ranked second in the world. The corresponding figures in 1999 for Japan was 31%, European Union 25%, South Africa 2.3% and Canada - 1.7%. Further, in 2001, while the ratio of insurance premium to the Gross Domestic Product (GDP)² was 9% for UK and Japan, and 5% for US, it was only 1.9% in India. Attracted by the huge untapped potential, many private players entered the market after the Insurance bill was passed in late 2000. A majority of these were collaborations between an Indian company and a leading MNC insurance/financial services company (Refer Table I).