The Hindu Business Line : P. Mohankumar, MD, Link-K Insurance Broking; Dr SNS Rajalakshmi Institute of Management, Coimbatore

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P. Mohankumar, MD, Link-K Insurance Broking; Dr SNS Rajalakshmi Institute of Management, Coimbatore

Penetration level negligible, says MD of Link-K Insurance Broking.

Mr P. Mohankumar

Our Bureau

Coimbatore, Sept. 22 The insurance penetration level is negligible in India and there is immense scope for employment in the sector, said Mr P. Mohankumar, Managing Director, Link-K Insurance Broking, Coimbatore.

Speaking at the inaugural function of the Business Line Club at Dr SNS Rajalakshmi Institute of Management here, he said though the economic slowdown had hit the profitability of industry and made thousands jobless, the insurance sector seems to be relatively insulated and many insurance companies are on a hiring mode.

The insurance sector, from being a fiefdom of public sector undertakings, has become a land of opportunities with the entry of a large number of private insurance companies.

There are 21 life insurance companies and an equal number of general insurance companies , leading to intense competition. This has brought about a plethora of distribution channels such as agents, brokers, bancassurance avenues, soliciting insurance through Internet or direct mailing.

Mr Mohankumar said many banks, financial institutions and insurance intermediaries saw a huge opportunity in marketing insurance products. Insurance brokers play a vital role in bringing together insurance companies and the insured, and their role assumes importance when a claim arises, he said. The brokers were “becoming professional risk managers”.

The Managing Director of Link-K said apart from agents/advisors representing the insurance industry, there is a huge demand for actuaries (who apply mathematical and statistical methods to assess risk). The industry is also becoming tech-savvy with facilities to buy certain types of insurance products online and payment of premium through Internet. Mr Mohankumar pointed out that the insurance penetration level in India is very low when compared with the global average. As against the global average of 3.7 per cent, the insurance penetration level in India is less than 1 per cent. He estimated the Indian insurance market to be 0.9 per cent of the global market. In India, 6 crore insurance policies were sold every year – of which over 3 crore policies relate to motor and health insurances.

The lack of overseas exposure has in a way insulated the domestic insurance players from being inundated with claims. Dr M. Gunasekaran, Director of the institute, and Mr Premanand, Deputy Regional Manager (Circulation), The Hindu, Coimbatore, also spoke at the event.