Get ready for next phase of reforms - Part 1
05 January 2006
The first year premium of the life insurance industry has grown by 260 per cent to Rs25,350 crore for the year ending 31st March, 2005, as compared to Rs9,709 crore in the year 2000-01.
The non-life insurance industry also witnessed a 180-per cent growth, writing a gross premium of Rs18,095.25 crore in 2004-05 — up from Rs10,087.03 crore in 2000-01.
"Insurance premium per capita in India has increased to $16.90 and overall penetration in India stood at 3.28 per cent of the gross domestic product in 2003. India's overall world rankings in terms of total premium volumes improved from 23rd in 2000 to 19th in 2003 and its share in the world market increased from 0.41 per cent to 0.59 per cent during the same period. We expect the industry to improve the insurance penetration to at least 5 per cent in the next five years," says Rao.
The IRDA has issued micro-insurance regulations to increase the spread of insurance in the country, particularly among the neediest segments.
According to him, the focus on aggressive marketing has made insurance a sunrise industry in the country attracting young talent. "The industry has successfully experimented with new distribution channels and bringing down the transactions costs. While the improvements may not look dramatic, the direction and speed is an indicator of India's emergence on the global scene," he adds. According to him the IRDA will continuously work to develop the market through new ideas and initiatives with inputs from various stakeholders.
In a lengthy interview - covering (a) the life insurance segment and (b) non-life segment and also reinsurance, he puts in perspective the past, present and future of the industry he regulates and guides. Some Excerpts: