Technoglitch
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India’s life insurance sector has underperformed compared to its Asian peers, says a report by McKinsey & Company.
The report says none of the private insurers here are creating value of the type indicated by the potential, all of them serving a minuscule segment, mainly to meet narrow investment needs.
Even within this confined space, says the report, they demonstrate a significant spread in performance, which is driven largely by distribution strategy.
“While most carriers offer affluent consumers a similar product mix, including a high share of investment-focused Unit-Linked Insurance Plans (Ulips), a few have outperformed by investing in their distribution channels.”
It added the leaders tend to focus on bancassurance, for example, and leverage partnerships with banks to expand scale and brand, to grow market share and profit margins.
It says unlike other markets, growth in India’s life insurance sector is correlated more closely to equity market performance than rising gross domestic product. For over a decade, it says, the private segment has delivered overall returns far below the cost of capital and even below those in other Asian markets.
Indian life insurance lagged Asian peers: McKinsey | Business Standard News
The report says none of the private insurers here are creating value of the type indicated by the potential, all of them serving a minuscule segment, mainly to meet narrow investment needs.
Even within this confined space, says the report, they demonstrate a significant spread in performance, which is driven largely by distribution strategy.
“While most carriers offer affluent consumers a similar product mix, including a high share of investment-focused Unit-Linked Insurance Plans (Ulips), a few have outperformed by investing in their distribution channels.”
It added the leaders tend to focus on bancassurance, for example, and leverage partnerships with banks to expand scale and brand, to grow market share and profit margins.
It says unlike other markets, growth in India’s life insurance sector is correlated more closely to equity market performance than rising gross domestic product. For over a decade, it says, the private segment has delivered overall returns far below the cost of capital and even below those in other Asian markets.
Indian life insurance lagged Asian peers: McKinsey | Business Standard News
