The Hindu Business Line : Rising income levels driving insurance penetration: IRDA

Hyderabad, April 12 The insurance business measured in the context of first year premium has registered an impressive growth of 94.96 per cent in 2006-07 as against 47.94 per cent in the previous year.

According to the Annual Report 2006-07 of Insurance Regulatory and Development Authority (IRDA), this has resulted in increasing insurance penetration in the country. The premium volume (or penetration of insurance) as a ratio of Gross Domestic Product (GDP) for the year 2006 stood at 4.10 per cent for life insurance and 0.60 per cent for non-life.

The growth in the life insurance can be attributed to rise in income levels. The saturation of markets in many developed countries has made Indian insurance markets even more attractive for global insurance majors, the report observed.

The growing strength of the life insurance industry can also be gleaned in the paid-up capitals of the insurers.

The total capital of the life insurers at the end of March 2007 stood at Rs 8,124.14 crore. The addition to the capital during 2006-07 was Rs 2,232.36 crore. The domestic and foreign joint venture partners added Rs 1,777.96 crore and Rs 454.40 crore respectively.

NEW POLICIES

The new policies underwritten by the industry were 461.52 lakh as against 354.62 lakh during 2005-06, showing an increase of 30.14 per cent. While the private insurers exhibited a growth of 104.64 per cent (73.37 per cent), LIC showed a growth of 21.01 (31.75 per cent).

The market share of private insurers and LIC in terms of policies underwritten was 17.17 per cent (10.92 per cent) and 82.83 (89.08 per cent) respectively.

The life insurance industry on the whole recorded a premium income of Rs 1,56,041.59 crore during 2006-07 as against Rs 1,05,875 crore in the previous year.

The world-wide insurance premium amounted to $3,723 billion in 2006 comprising of $2,209 billion in life and $1,514 billion in non-life.

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