Indian insurance sector has remained on rails even in the toughest of the times, thanks to the Insurance Regulatory and Development Authority (IRDA)'s tough and conservative apparatus. A sound insurance segment ensures better economic development as indicated by a study which states that 1 per cent increase in insurance penetration leads to 13 per cent reduction in uninsured losses and 22 per cent reduction in taxpayers' contribution to recovery following a natural catastrophe.
Keeping pace with international happenings, Indian insurance industry has remained in a good health and maintained absolute transparency and highest standards of corporate governance. Assets under management (AUM) of the Indian insurers are slated to touch Rs 20 trillion (US$ 376.51 billion) while the general insurance sector is anticipated to grow 18 per cent in 2012-13, said J Hari Narayan, Chairman, IRDA. He further reported that the insurance sector has grown substantially over the last few years, with its AUM from Rs 8 trillion (US$ 150.57 billion) in 2008 to Rs 18 trillion (US$ 338.82 billion) in 2011-12.
- Life insurance companies have registered a growth of 4 per cent in the first three quarters of financial year 2012-13. The total premium collection from the individual segment by 24 life insurers stood at Rs 40,688 crore (US$ 7.66 billion) in April-December 2012 as against Rs 39,131 crore (US$ 7.36 billion) in the corresponding period last year.
Public sector insurer Life Insurance Corporation of India (LIC) recorded 11.3 per cent growth in the retail segment, with collection of Rs 28,017 crore (US$ 5.27 billion) during April-December 2012 while private sector insurers' collection from individual segment stood at Rs 12,671 crore (US$ 2.38 billion).
- IRDA reported that insurance density came out be US$ 49 while insurance penetration stood at 4.1 per cent in 2011.
The measure of insurance penetration and density reflects the level of development of insurance sector in a country. While insurance penetration is measured as the percentage of insurance premium to the gross domestic product (GDP), insurance density is calculated as the ratio of premium to population (per capita premium).
New Developments/ Product Launches
- Allstate Corp, the second largest insurer in the US has inaugurated its first technology and operations centre in Bangalore, India. The centre, an integral part of Allstate's global value chain, is majorly a technology services centre serving in the areas of business intelligence, analytics, testing and mobility. It will extend the Illinois-based company's technology infrastructure, support a 24x7 operational work-flow and enhance technology and innovation capabilities.
- Metlife India is now PNB Metlife India after Punjab National Bank (PNB) picked up 30 per cent stake in the life insurance company. Apart from PNB, MetLife India has two other banks, Karnataka Bank and Jammu and Kashmir Bank as its distribution partners. At present, around 60 per cent of the business is coming from bank channels and the company expects it to increase further over next few years. Partnerships with the banks would also be fruitful as the business volume grows, said a spokesperson from MetLife.
- Two of the insurance companies are planning to launch a specialised health cover for diabetic patients in India. While Apollo Munich has already filed a diabetic cover policy document with IRDA, Religare Health Insurance will soon submit documents for a similar cover with the regulator. Diabetes is an epidemic in India (with around 61 million people having it) and insurance companies look at this as a good business proposition. Unlike the existing health covers, which do not cover hospitals admissions relating to complications of diabetes for up to four years, the proposed policies will cover diabetics from day one.
- With a view to cover more and more Indians under the umbrella of insurance, public sector general insurers are mulling expanding their operations to other countries in 2013-14. With a large number of Indians and Indian businesses in South-east Asia, West Asia and Africa, these regions are emerging as preferred destinations.
The four general insurers - New India Assurance, United India Insurance, Oriental Insurance and National Insurance - are considering setting up more international centres. While Oriental Insurance might hold stake in proposed reinsurance firm in Nepal, New India is looking to expand in Canada, Qatar and Myanmar. United India Assurance is also looking at South East Asia and Middle East for expansion. Moreover, LIC, GIC Re, four PSU general insurers are already holding stakes in Kenyan Insurance joint venture (JV).