How does the insurance industry fare with the wafer-thin margins and extremely wide consumer base model? Well, this low-margin, high-volume business does not seem to deter professionals as the costs are only residing on the cost of sales and the customer gets to buy only a promise on paper for the future.
The concept of insurance began with the practice of shipping goods. Britain was the maritime leader for a long time and coupled with its missionary delegations to the rest of the world proved decisive in spreading such ideas about trade and commerce and also financial instruments such as insurance.
Insurance companies which have entered India hope to increase their footprint in very little time as they are working under wafer thin margins in both life and non-life insurance sectors. Non-life includes health (hospitalization), goods and household safety, fire, commercial assets, shipping (logistics), car accident and such like.
Well, this is an industry and an industry thrives on healthy profits. With wafer thin margins the players in the industry try to ensure a very wide base of customers and also non-claimants as a major percentage of the applicants....
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