AUM of life insurers may treble to $ 1 trillion by 2020: Life Insurance Council

HYDERABAD: Assets under management (AUM) of life insurers will almost treble to USD 1 trillion (nearly Rs 60 lakh crore) by 2020 from the current Rs 19.4 lakh crore, according to projections by the Life Insurance Council.

Life Insurance Council Secretary General V Manickam said projections were made on the basis of growth in GDP and household savings over the next few years.

"With the help of all the opportunities available, we are confident that we will be able to grow 2-2.5 times or 3 times of the current size by 2020. That means in terms of numerical numbers, our AUM would reach around USD 1 trillion. That means by 2020, the AUM of life insurers would reach around Rs 60 lakh crore. Now it is nearing Rs 20 lakh crore," he said in a press conference.

He said the level of penetration of life insurance industry is expected to grow from present 3.2 per cent to 5 per cent by 2020.

"Expected CAGR of life insurance industry will be 12-15 per cent in the next 3-5 years....The net household financial savings could reach around 30 per cent in the next 3 years from the present level of 23.1 per cent (FY 2011-12), which will benefit life insurance as it is the second most preferred financial instrument," he said.

Manickam further said after reaching Rs 60 lakh crore AMU in life insurance, investments into the infrastructure sector are expected to grow from Rs 1.73 lakh crore to Rs 3.5 lakh crore by 2020.

The growth over period would double the employment opportunity in the life insurance industry to five lakh people from the present 2.41 lakh.