Life Insurance Marketing in India (B): The Changing Distribution Norms

In developed countries, per capita insurance premium¹ was much higher than in India. In 1999, per capita insurance premium was only $8 in India 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, India's share was only 0.3%, though it had the second highest population in the world. In the same year (1999), Japan's share was 31%, the European Union's 25%, South Africa's 2.3% and Canada's - 1.7%. And in 2001, while the ratio of insurance premium to the Gross Domestic Product (GDP)² was 9% in UK and Japan, and 5% in the US, it was only 1.9% in India.

Attracted by the huge, untapped insurance market in India, 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).