Asian life insurance market is bigger

by Surekha Galagoda

The life insurance market in Asia is bigger than general insurance primarily due to lack of adequate social security systems and the percentage of the population above 60 years. The Asian life insurance premium was US$ 573 billion while the world life insurance premium in 2005 was US$ 1,974 billion. The world's total insurance premium last year was US$ 3, 426 billion, said Managing Director Aviva Life Insurance Co. India (Pvt) Ltd A.W. Patterson at the International Insurance Congress 2006 held last week.

Speaking on the theme Emerging Trends in Life Insurance in Asia, he said that despite the phenomenal growth in other markets notably in India and China, Japan still dominates the life insurance market.

Asians spend more on life insurance than the global average primarily due to lack of adequate social security systems. This together with the high population over 60 years presents a big opportunity for the insurance industry.

Since the deregulation in China and India more than 30 players have started their operations in China while India has already witnessed the entry of 14 private life insurance players during the last two years.

The modes of distribution has witnessed significant changes with Bancassurance emerging as the major alternative channel because of its inherent benefits such as wider customer reach, cost effectiveness, product familiarity and increasing customer sophistication where direct sales force was the main channel of distribution until now.

Patterson said that "we believe in the future and the market of Sri Lanka." He said that too much competition will divide the industry. Therefore work together and listen to the voice of the customer for the development of the industry. As 22% of the population will be over 60 years in 25 years there is a huge market for everybody, but plan for it now, Patterson said.

Chief Executive Officer/Managing Director Life Insurance Corporation (Lanka) Ltd Ravishanker Prasad said at present the Indian government is paying more on pensions than salaries. Therefore to rectify this position we are looking at several anomalies. At present the challenge in India is longetivity in pension insurance.

Prasad said that in the healthcare market India is treading with a lot of caution. He said the customers should not be neglected while the major challenge is pricing the healthcare products considering the length and breath of India's demography.

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