Chennai: By accelerating digitisation and leveraging next generation technologies, the life insurance sector can double its assets under management to Rs 70 lakh crore and the non-life to Rs 4 lakh crore, finds a study.
According to a study by Boston Consulting Group (BCG) and FICCI, the AUM of life business will grow by a CAGR of 14 to 15 per cent till FY25 and this will double the assets from Rs 35.80 lakh crore to Rs 70 – 75 lakh crore.
Non-life AUM too is expected to grow by 15 to 16 per cent from Rs 1.7 lakh crore to Rs 3.85 – 4.15 lakh crore in the next 5 to 6 years. The new annualized business premiums of life insurance sector and gross premiums of non-life will also grow at a similar pace.
Digital trends will be a key catalyst for growth and will be at the core of the industry’s transformation, finds the study. Insurers will have to drive digital-led transformation across 10 major themes to unlock growth, improve business economics, and deliver sup-erior customer, distributor, and partner experience.
This includes building a customer centric mindset, building bionic distribution by leveraging digital and data as a ‘force multiplier’ to enhance human interactions improving productivity and quality.
Insurers will have to accelerate process digitization and automation by deploying next generation technologies such as robotic process automation, artificial intelligence and machine learning. They will have to set up ‘next generation’ technology function as the core of a digital-led model and rewire business using analytics at scale.
Policymakers and the regulator also will have to play a crucial role in enabling the insurance industry to innovate. They will have to drive reforms in public sector insurance companies, deepen penetration of insurance through social security schemes, help address product-need gaps by enhancing coverage of social security schemes and encourage cross-pollination of product innovation.
The sector will also need policies to attract further capital flow to the industry, encourage innovation, implement robust risk-based capital regime in timely manner and facilitate dynamic underwriting for enabling further product innovation. Most importantly, insurers will have to adapt to the fast evolving reality and invest in themselves as well as their partners.