New Risk Management Techniques and Improved Monitoring and Adoption of Data Analytics to Enhance Underwriting Profitability.
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Date
2014
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Abstract
The Indian insurance industry seems to be in the state of volatile nature. While there has
been a perceptible change in the market d>mamics since liberalization and economic
reforms, a considerable amount needs to be done for future growth and development of
the market in an orderly and sustained manner. Notwithstanding the strong improvement
in penetration and density in the last 10 years, India largely remains an under-penetrated
market. The market today is primarily dependent on push, tax incentives and mandatory
buying for sales. India’s ranking in the world insurance market based on total premiums
collected has dropped to number 15 in 2011 from number 11 in 2010. India’s share of the
world insurance markets has declined to 1.58% in 2011 from 1.8% in 2010, being
displaced by countries such as Brazil, Spain and Taiwan, which now rank higher than
India. Globally, total insurance premiums for calendar year 201 1 contracted by 0.8%,
with premiums comraeting in advanced economies at-l.l'Xi and those in emerging
economies growing at 1.3%; with life insurance contributing 57% at US$2,627 billioir and
non-life contributing the balance 43% at US$1,912 billion. Growth Drivers in the industry
are growth of the financial industry as a whole. Growth of life and non-life industry,
promoting innovation and removing inefficiency, competition and orderly growth, growth
of specific insurance segments, rural as a major trust and growing Economy. Some of the
trends in the insurance sector are Hybrid distribution channel. Difficulty in designing
Marketing Mix, Regulatory trend. On line policy. Claim Management, Customer Servicing,
FDI in insurance, seeking of riskier assets to beat low interest rates, New risk
management techniques and improved monitoring and adoption of data analytics
to enhance underwriting profitability.