Altius Finserv Discuss on Financial Services

Introduction

India has a diversified financial sector, which is undergoing rapid expansion. The sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities. The financial sector in India is predominantly a banking sector with commercial banks accounting for more than 60 per cent of the total assets held by the financial system says Pawan Bansal MD of Altius Finserv.

India's financial services sector such as Altius Finserv and many other Finserv companies has always served the country’s economy well, accounting for about 57 per cent of the gross domestic product (GDP). In this regard, the financial services sector has been an important contributor.

The Government of India has introduced reforms to liberalise, regulate and enhance this industry. At present, India is undoubtedly one of the world's most vibrant capital markets. Challenges remain, but the future of the sector looks good. The advent of technology has also aided the growth of the industry. About 75 per cent of the insurance policies sold by 2020 would, in one way or another, be influenced by digital channels during the pre-purchase, purchase or renewal stages, as per a report by Boston Consulting Group (BCG) and Google India.

Market Size

The size of banking assets in India reached US$ 1.8 trillion in FY14 and is expected to touch US$ 28.5 trillion by FY25.

During 2013-14, the life insurance industry recorded a premium income of Rs 3.14 trillion (US$ 49.67 billion), as against Rs 2.87 trillion (US$ 45.39 billion) in the previous financial year, registering a growth of 9.4 per cent.

India’s life insurance sector is the biggest in the world with about 36 crore policies, which are expected to increase at a compounded annual growth rate (CAGR) of 12-15 per cent over the next five years. The insurance industry is planning to hike penetration levels to five per cent by 2020, and could top the US$ 1 trillion mark in the next seven years. The total market size of India's insurance sector is projected to touch US$ 350-400 billion by 2020.

According to the recent data released by the Insurance Regulatory and Development Authority (IRDA), the gross direct premium underwritten by non-life insurance companies during 2013-14 was Rs 77,538.25 crore (US$ 12.26 billion) compared to Rs 69,089 crore (US$ 10.92 billion) in 2012-13. The gross direct premium underwritten during 2011-12 was Rs 58,119.71 crore (US$ 9.19 billion). The non-life sector growth was 19 per cent in 2012-13 and 23 per cent in 2011-12.

India is the fifteenth largest insurance market in the world in terms of premium volume, and has the potential to grow exponentially in the coming years. Life insurance penetration in India is just 3.1 per cent of GDP, which has almost doubled since 2000. A fast growing economy, rising income levels and improving life expectancy rates are some of the many favourable factors that are likely to boost growth in the sector in the coming years.

AltiusFinserv Private Limited Investments are corpus in India’s pension sector expected to cross US$ 1 trillion by 2025, following the passage of the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013.