Around 65% to 70% of insurance business in India will be handled by brokers in three to five years’ time, predicts Mr C Radhakrishna, co-promoter with India Insure Risk Management & Insurance Broking Services, which is among the earliest entrants to the young market.
He believes volume will grow following pricing de-regulation since 2007 and given the prospect of more liberalisation, such as free wording of policies, in the future.
Speaking to Business Line, he says that the broking sector has grown from 0 to 15% of the market, since the first broking licences were handed out in 2002 by the Insurance Regulatory and Development Authority.
When asked about the short-term outlook for the industry, he expects consolidation in the market. He said: “Insurance broking is in for a rough but interesting ride. Premium drops for insurers meant steep revenue cuts for brokers too. Finally, the men will be separated from the boys and only those brokers who have long term ambitions and deep pockets will flourish.”
He notes that around 140 broking licences were issued by IRDA in the first 12 months when the doors were opened to brokers, with a mix of serious and not-so-serious players.
