Despite the economic slowdown and negative sentiments gripping investors, private insurer HDFC Standard Life

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sees an opportunity for the insurance industry to grow significantly in the next financial year.

HDFC Standard Life expects the industry to growth between 20-25 per cent in fiscal 2009-10. The company says the industry would grow by creating awareness about the need of insurance, bringing in more transparency and servicing customers better.

India’s insurance sector is expected to grow 17 per cent in fiscal year 2009 if the economy expands at 7.6 per cent, the Insurance Regulatory and Development Authority (Irda) has predicted.

During fiscal year 2008, business of life insurance companies had grown by 23.3 per cent.

HDFC Standard Life says the economic slowdown would be a blessing in disguise for the insurance industry. It says that the apprehension of investors to invest in market will bring in more business for insurers because investors would make long-term investment in insurance policies.

“The slowdown in the economy and volatility in the financial markets could last for some more time. Consumers may, hence, take longer to regain their confidence in financial markets and start committing to longer-term policies. Given the present level of uncertainty, a lot of retail customers are moving to bank deposits. The need for insurance has not disappeared. Possibly, the need has increased due to uncertainty,” said Paresh Parasnis, principal officer and executive director, HDFC Standard Life Insurance.

He said customer education and emphasis on an agent training will continue to be of prime importance for the industry. Companies are trying to improve efficiency and improve productivity across the board.

"While the life insurance market will continue to grow, companies will step up investments in improving servicing standards. Demystifying the technicalities of life insurance is a major challenge for the industry and we foresee a move in that direction," Parasnis said.

Talking about initiatives taken by HDFC Standard Life, Parasnis said the insurer has launched a new campaign to spread awareness about importance of life insurance as a primary tool for protection and savings. The campaign highlights the importance of life insurance planning, no matter what the market or economic scenario is. To increase its product offerings and to provide more choices to customers, HDFC Standard Life will also launch new plans in the present quarter. These plans include both the unit-linked insurance policies (Ulips) and traditional plans.

At present, HDFC Standard Life has a capital base Rs 1,621 crore and maintains a solvency margin of 309 per cent (as against 150 per cent mandatory requirement of Irda).