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By CYRIL TUOHY, managing editor, Risk & Insurance®

Indian 20-to-40 year olds are more willing to take risks than their peers in other developing Asian economies, a new survey finds.

Dividing approaches to four different buckets -- health, lifestyle, finance, and career risks -- Indian consumers were more likely to take risks with their lifestyle, compared to taking risks with their financial situations or their careers, the survey finds.

Averaged out across the four risk buckets, Indian consumers were more likely to take risks than their peers in China, Malaysia, Vietnam and Indonesia, according to the "Survey of Risk Appetite and Insurance: Asia-Pacific 2011," released Aug. 3 by Swiss Re.

Indian consumers have "strong needs for insurance and financial planning, fueled by worry about medical expenses," the survey concludes.

The survey, released earlier this month, covered 13,800 consumers from age 20 to 40 in major cities in 11 Asia-Pacific markets in April and May. A similar survey on risk attitudes in the Asia-Pacific region was conducted by Swiss Re in 2009.

With an estimated 1.21 billion people in 2010, India represents the second most populous nation on earth after China. Life and property/casualty insurance penetration remains very low, though property/casualty insurance last year grew faster in South and East Asia than anywhere else in the world.

In 2010, India life insurance premium volume totaled $67.8 billion, and the rate of life insurance premium penetration was just 4 percent, even in the wake of government reform and liberalization of the industry more than 10 years ago.

Average premium growth in India for life policies in 2010 was 4.2 percent, down from 7.9 percent growth in 2009, according to Swiss Re's February 2011 Sigma study.

Nonlife insurance premium volume in 2010 came to $10.6 billion, and the penetration rate was just 0.7 percent. Nonlife premiums grew by 9.8 percent in 2010 over the previous year, due mainly to the strong performance of auto and property coverage, along with health insurance premiums, Swiss Re's Sigma study reports.

More foreign insurers are expected to enter the India market this year in collaboration with local insurance companies, and banks are also preparing to enter the India property/casualty market. "This will further fragment the market and increase competitive pressure," write the authors of the Sigma report.

The top reasons Indian Generation X and Generation Y consumers put off purchasing insurance include the level of coverage, price, carrier reputation and economic uncertainty, the risk appetite survey finds.

Once consumers have decided to buy coverage, Indian Gen Xers and Gen Yers list value for money, the carrier's reputation, financial soundness of the insurance carrier, and products that match their needs as the primary reasons for choosing an insurance company. Policy issuance and administration, accessibility, claims, service and innovation all rank relatively low.

Indian consumers prefer buying life and property/casualty polices from agents to a much greater degree than their Gen X and Gen Y peers in other developing Asia-Pacific markets, the survey finds. They also eschew using the Internet to buy polices to a greater degree than their peers.

Auto-related insurance premiums made up 58 percent of Indian insurance premium income in fiscal year 2007, according to a separate analysis on the Indian insurance market released by Ernest & Young in 2008.

Auto premiums were followed by health premiums at 11 percent of total premiums income, fire at 9 percent, marine at 8 percent, engineering at 3 percent, personal accident at 2 percent and all other sources accounting for 7 percent of premium income.

August 15, 2011

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