Industry Analysis (10/10)
Insurance Industry🏥🚗
The Indian Insurance market is valued at over $131 Bn as of FY 22, it has grown by over 17% CAGR in the last two decades. The Insurance industry in India has 58+ companies, 24 Life insurance and 34 Non-life insurance companies, LIC being the sole Public sector Life insurance company. This industry has witnessed huge growth driven by private sector participation and improved distribution capabilities.
🌟 Cyclicity: The insurance industry is Non-Cyclical, as the demand for insurance
(life and non-life) has remained fairly consistent in the last decade despite
economic turnarounds.
🌟 Value Chain:
➡️ Product Development (Policy framework, Risk assessment and pricing)
➡️ Marketing and Sales (Customer acquisition, Promotion & Advertising)
➡️ Claim Management (Prevention, Mitigation, Investigation, Disbursement)
➡️ Asset Management (Investments, Portfolio Management)
🌟 Revenue Drivers:
➡️ Insurance Premiums
➡️ Investment Returns (Dividends, Bonus etc.)
🌟 Cost Drivers:
➡️ Fixed: License, Salaries, Office Infrastructure
➡️ Variable: Claims, Agent Commissions, Service costs
🌟 Growth Drivers:
➡️ Awareness of Insurance products
➡️ Digital penetration (Importance of Insurance)
➡️ Rising Disposable Income
🌟 Key Market players:
Industry Segmentation
🔻 Life Insurance (75%)
🔻 Health Insurance (8%)
🔻 General Insurance (17%)
Public Awareness for Insurance has improved a lot in the past 2 years, owing to the Covid pandemic. Insurance is now being sold completely online and companies like Policy bazaar, Ditto and Acko actively invest in marketing to improve their sales.
