Latest news with #NarendraBharindwal
Indian Express
2 days ago
- Business
- Indian Express
‘Insurance industry on track to more than double, set to hit Rs 25 lakh crore by 2030'
India's insurance sector is projected to witness robust expansion, with gross underwritten premiums (GWP) expected to more than double — rising by 123 per cent to Rs 25 lakh crore by 2030 from Rs 11.2 lakh crore in 2024, according to a report by the Insurance Brokers Association of India (IBAI) and McKinsey & Company. This surge is likely to lift insurance penetration from the current 3.7 per cent to 5 per cent, bringing India closer to the global average of 6.8 per cent recorded in 2023. Between FY 2020 and FY 2024, the industry saw strong double-digit growth, with total premiums across life and non-life segments increasing from Rs 7.8 lakh crore to Rs 11.2 lakh crore, the report said. 'India's insurance sector is entering a new era of opportunity, with the potential to more than double by 2030,' said Narendra Bharindwal, President, IBAI. The report said the retail segment could attain GWP of around Rs 21 lakh crore by 2030, of which over 90 percent is driven by the life segment. 'Around 65 per cent of the retail opportunity is present at the extreme ends of the customer pyramid-the ultra-high-net-worth individuals (UHNI) and high-net-worth individuals (HNI) at one end, and the mass-market customers at the other end,' it said. The intent to buy insurance is missing, despite awareness, the report said. In the retail segment, among affluent and ultra-high-net-worth and high-net-worth customers (UHNI and HNIs are individuals with household personal financial assets over Rs 8.5 crore), 60 per cent customers believe that their ideal life insurance cover should be 10 times their salary, yet only 30 per cent have this cover. Similarly, in the institutional segment, 70 percent micro and small enterprises purchase insurance because of regulatory or client mandates. 'By 2030, UHNI and HNI customers could account for around 20 per cent of the total projected retail insurance value pool, while the mass-market segment is expected to account for nearly 45 per cent,' the report said. While nearly 70 per cent of affluent and UHNI / HNI retail customers purchase insurance on the recommendations of trusted advisors, 45 per cent of mass market customers rely on the recommendations of friends and family, it said. The claims experience is a key differentiator in the insurance journey. As many as 50 per cent of affluent and HNI+ customers considered switching their insurers or channel of purchase and nearly half of them switched due to dissatisfaction with the claims process. Similarly, over 55 per cent of SMEs have had their claims rejected, and over 75 per cent seek assistance with documentation and paperwork in the claims process, the report said. 'These segment-specific insights are derived from the IBAI Insurance Insights Survey, which reveals the behaviour and pain points of 2,500 retail customers,' the report said. GWP for the institutional segment, largely in non-life insurance, is expected to grow nearly three times to reach Rs 2.8 lakh crore by 2030. 'While the SME segment currently has a contribution of only close to 10 percent, it is expected to grow the fastest. Around half of the total SME opportunity lies in clusters across 17 Indian cities, in nearly 10 leading, capital-intensive industries such as textiles, automotives, pharmaceuticals, and industrial goods,' the IBAI-McKinsey report said. This segment lacks the intent to buy insurance, often because the enterprises do not entirely believe it is critical, and because lack of guidance and handholding, as well as persistent margin pressure cause them to deprioritize it, it said. The IBAI survey revealed that when SMEs do buy insurance, it is driven by the need to comply with regulatory and client mandates. 'They lack internal risk-management expertise, seeking advisory and guidance, products tailored to their needs, and support on documentation and claims processes. Equipping them to foresee their risks and empowering them through products customized at the sector level could draw them into the fold of insurance protection,' it said.
News18
13-06-2025
- Business
- News18
Air India, SpiceJet May Face $40–50 Mn Insurance Hike; Airfares Likely To Rise 2–5%: Report
Last Updated: Air India and SpiceJet may see insurance premiums rise to $40–50 million after the crash, possibly pushing airfares up by 2–5%. Despite the catastrophic crash of Air India Flight AI171 near Ahmedabad, immediate aviation insurance premium hikes are unlikely, Narendra Bharindwal, President of the Insurance Brokers Association of India (IBAI), told Moneycontrol. However, he added that the cumulative impact of repeated Boeing-related incidents could drive up premiums across the aviation sector in the upcoming underwriting cycle. According to reports, Boeing aircraft operators—particularly Air India, which operates 34 Boeing 787s and has 20 more on order, and SpiceJet, which flies Boeing 737 MAX 8s—could face premium increases from around $28 million to as much as $40–50 million. This may lead to a 2–5% hike in airfares, sources told Moneycontrol, as airlines look to offset rising insurance costs. Moneycontrol. Premiums Could Rise 100% by 2026 Industry sources said that insurers may now view Boeing operators as higher-risk compared to Airbus-dependent carriers like IndiGo or Vistara, leading to a hardened market. Experts such as Hitesh Girotra of Prudent Insurance Brokers believe the combined fallout of the MAX and 787 issues—now topped by the Air India tragedy—could increase aviation premiums for Boeing operators by 20% to even 100% in 2026. 'The market is clearly hardening, and Boeing's deteriorating risk profile is a central reason," Girotra told Moneycontrol. The crash of Flight AI171 on June 12, killing 241 of 242 on board, marks the first-ever fatal Boeing 787 accident. The incident could spark insurance claims of up to Rs 300 crore split between Indian insurers and global reinsurers. The Aircraft Accident Investigation Bureau (AAIB) is probing the crash with support from Boeing and the U.S. National Transportation Safety Board (NTSB). If defects in the 787's design or production are uncovered, Boeing's liability insurers may face lawsuits echoing the $2.5 billion in settlements paid after the MAX disasters. Boeing's Long Road of Turbulence Boeing's aviation insurance costs surged after the twin MAX crashes in 2018 and 2019, which killed 346 people and exposed systemic failures in design and FAA oversight. The MAX was grounded globally for 20 months, costing Boeing more than $20 billion in direct losses and $60 billion in canceled orders. An internal 2016 survey cited by US investigators revealed that 40% of Boeing employees involved in safety certification felt 'undue pressure" to fast-track approvals. The fallout led to significant premium hikes for Boeing operators, with Air India's own insurance cost nearly doubling post-2019. The troubles didn't end there. The 737 MAX 7 and MAX 10 are still awaiting certification as of June 2025, with approvals delayed to 2026 due to technical flaws and tightened FAA scrutiny, especially after the Alaska Airlines MAX 9 door plug blowout in January 2024. The FAA has also revoked Boeing's authority to self-certify airworthiness for MAX aircraft. Meanwhile, Boeing's 787 program has been under audit after reports of fastener installation errors and falsified records. The crash of Flight AI171 only intensifies these concerns. Airlines May Pass Costs to Flyers Analysts told Moneycontrol that higher insurance costs could derail Air India's ambitious fleet retrofit program and strain SpiceJet's planned Rs 3,000 crore capital raise, likely prompting a cost pass-through to passengers. 'In a hardened insurance market, Boeing operators are clearly under pressure. Passengers could bear the brunt in the form of higher fares," one analyst noted. With the insurance market tightening and Boeing's risks amplified, the financial impact of the Air India crash is expected to ripple across global aviation, insurers, and passengers alike. tags : Air India crash Aviation disasters Location : New Delhi, India, India First Published: June 13, 2025, 12:36 IST News business Air India, SpiceJet May Face $40–50 Mn Insurance Hike; Airfares Likely To Rise 2–5%: Report
