Developing Pensions Market in India
July 3, 2001

Theme Address by Mr NN Joshi, Chief Representative, ING Insurance

Ladies & Gentlemen,

It is my proud privilege this morning to join FICCI President in welcoming you to this Seminar, on behalf of FICCI - ING Foundation of Research, Training and Education in Insurance. This Foundation has been set-up jointly by FICCI and ING Insurance International. It will seek to help focus the Industry attention on the urgent need for creating a strong Research and Education base which, in course of time, may enable the Insurance Industry to develop world class Professionals and Practices. Such Professionals and Practices, we believe, are essential to ensure that the Insurance Industry delivers to the Indian Society, in general and to the Indian consumer, in particular, the promise of liberalisation! In furtherance of this objective the Foundation will focus on promoting and facilitating

(i) Specific Research Projects
(ii) Consumer Education initiatives
(iii) Development of authentic and reliable Resource and Data Base for reference and research; and
(iv) Induction of world class training technology and training materials.

The Foundation, besides joining hands with FICCI for organising this Seminar has taken up a Research Project to study the Insurance protection needs in the Rural Market. The Foundation will be happy to share the details of this project with the Industry and will welcome support and participation.

The subject of this day long Seminar viz Developing Pension Markets in India, we believe is timely, opportune and even urgent.

The age profile of Indian population is changing rapidly. More and more Indians now tend to live much longer. The mortality is falling and longevity is rising. It is estimated that number of Indians who are 60 + would have risen by 107% between 1991 - 2016 while total population may rise only by 49% during the same period. This demographic development, when viewed in the context of the traditional family support systems coming under increasing socio - economic strains, raises alarm bells. How shall the society look after its Aged and the Aging veteran citizens in their twilight years when their income earnings may dwindle or even disappear but their financial needs will not! These alarm bells become uncomfortably shriller when we take into account the families which may still be on the other side of the dreaded poverty line!

Let us put all this in the context of the Indian Constitution which promises to all its citizens 'the dignity of the individual'!. And then ask ourselves: what do we need to do Today so that we don't regret Tomorrow ?

This seminar, ladies and gentlemen, poses this question to the Insurance and Pension Industry in India. We are all aware, in all humility, that the Insurance and Pension Industry in India does not have all the answers. There is a lot that will need to be done by the Government, and the social security agencies in this behalf, particularly for those who are below the poverty line or are otherwise far too underprivileged to pay even minimal cost for insuring their future!

But for a very large segment of our population, which is ever growing in numbers in the wake of rising economic prosperity, this industry has the answers!

Pension is often seen as a welcome option! It is indeed so! It is a mechanism for saving for old age; a fund built up during the earning years of the individuals, which if efficiently and profitably managed by competent people can provide them adequate Income in their at twilight years to meet their requirements during their lifetime and those of the spouse thereafter.

The Insurance and Pension Industry will be happy to focus on this segment. Some analysts have tried to forecast the potential market size arising out of this segment and their estimates vary from a conservative Rs. 150000 crores in the next 15 years to an optimistic Rs. 326000 crores by the year 2005!

This Seminar thus is an exercise to explore what, to my mind, is a win-win situation. For the Government; for the Industry and most of all for the Indian Citizens. By leveraging the inherent synergies, the Govt. could focus more on the social security for the destitute and the underprivileged, while the Industry provides sustainable fund-based solutions to the citizens who can afford and shall therefore logically not add to the burden of the Government. What this industry may need, in return, could be some regulatory and tax concessions !

Let me say in conclusion, ladies and gentlemen, that the context and content of this Seminar; the utmost significance of the subject it chooses to examine, analyse, understand and act upon; the outstanding class and authority of the panellists and participants; the opportune time of this exercise makes it potentially a momentous event for the Insurance and Pension Industry in India !

I thank you for your kind attention.