Ageing India: The next great opportunity for insurers

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SummaryTowards the last decade of the 20th century, India and China enjoyed a distinct advantage over other rapidly emerging economies.

Towards the last decade of the 20th century, India and China enjoyed a distinct advantage over other rapidly emerging economies. It was the advantage of a large and growing population, which readily provided huge workforce for deployment in low-cost manufacturing and the services sector when agriculture could no longer support the fast growing population of youngsters with bigger dream and aspirations.

On the other hand, those with regular income augmented the middle class and ignited robust consumerism in the economy. As a result, the so-called menace of population growth turned into a boon.

As if like nature, the economy also invents mechanism for survival and growth. The business of life insurance, which is directly linked with the population size, life expectancy, income and living standard, also peaked during the relevant period, reinforcing the fact that population and its quality determine the potential for development of the business of insurance.

In our country, another demographic shift has slowly begun and this is going to impact the other end of the population spectrum. Education, improving healthcare facilities, delayed marriages and postponement of pregnancy by working couple have been systematically contributing to reduction in growth rate of population and increase in longevity of people who would be entering the senior citizen segment now and, later, over a period of next 40 years.

It is estimated that the ratio of dependent population to working population may multiply by 200% to 250% by 2050.

There would be about 20 crore people who would require financial and other support with regard to basic healthcare and civic amenities for a dignified life. The responsibility of their welfare rests with the government in a democratic republic, but the existing social security schemes and the governmentís delivery system are not expected to grow fast enough to provide for the infrastructure and resources that would take care of people on such a large scale.

The issue, therefore, is going to be a major concern for the citizens as well as for the government and local bodies. A mechanism has to be developed to address the issue with due foresight and planning.

In this context, insurance providers can play a big role as insurance is the most scientific of all the available tools to provide somewhat satisfying solution without disturbing the other priorities of a fast progressing society or nation.

Even in developed countries like Japan and the US, the social security

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