Study of growth in retail insurance with special reference to rural India

Rural India is a target market for many players in the financial sector, and insurance companies are no exception. At the moment, India is one of the best markets to be in. Over 75 percent of its vast population has no insurance. Global reinsurance major, Swiss Re, points out that the industry will touch a growth of up to $50 billion in the next 10 years, with individual life insurance accounting for almost $40 billion. Little wonder, then, that top global names such as AIG, Allianz, AMR Aviva, ING, MetLife, New York Life, Old Mutual, Prudential, Standard Life and Sun Life are here in joint ventures with eminent Indian companies such as Tata, Birla, HDFC, Kotak and ICICI, among others. As per IRDA guidelines, for the life sector, in the first year, 5 per cent of the total policies written had to come from the rural sector. This would go up to 15 per cent in five years. Similarly, for the non-life sector, 2 percent of the total gross premium income had to come from the rural sector going up to 5 per cent in five years.IRDA defines rural as an area with maximum population less than or equal to 5000, with population density equal to or less than 400 per sq km, with at least 75% male working population engaged in agriculture or related activity.