In the study, Business Consulting Group has argued for a well regulated entry of new players on three important premises: it is beneficial to the customers, it will benefit the economy and it will not harm the interests of the insurance PSUs and their employees.

``The key benefits to the customer will be in terms of new products which are not available today, aggressive marketing of cheap insurance products helping the common man to get a cover, and in vastly improved service quality. Some examples of life products not available today include mortgage protection policy, which will help millions of home owners who have taken housing loans to retain their home even in the event of untimely death of the family breadwinner,'' it said.

Service quality in insurance industry isabysmal as compared to developed countries. Business Consulting Group has cited in the paper that the number of days required to get an insurance policy as 15-20 in India as against three days in the UK. Similarly, for settling a claim the time taken is 87 days as against three days in the UK. "Surely the Indian customer wants a better deal," argues Raj Nair, chairman, Business Consulting group.

The second important point made in the paper are the benefits to the economy as a result of liberalisation of the sector. "Insurance penetration in India is only six USD per capita whereas it is double in Indonesia and 30 times in Malaysia," Raj Nair said while presenting the white paper in a press conference. ``The real growth rate in premium in India is lower compared to that in other Asian countries,'' he said. The growth in insurance premiums will lead to higher savings rate which is necessary to sustain a high GDP growth.