Life insurance segment among the fastest growing globally: Assocham

India will continue to be one of the fastest growing life insurance markets with annual gross written premiums of Rs 2.68 lakh crore set to grow by 13 to 14 per cent and reach Rs 5.17 lakh crore by 2015, industry body Assocham said today.

The country will contribute 10 per cent of total global premium growth in this period and be one of the few major markets to grow at double digit rates, it said.

The life insurance industry grew by 28 per cent during 2000 and 2010 in new business premiums, 27 per cent in annualised premium equivalent (APE) and 25 per cent in gross written premiums, catapulting India to top ten markets globally.

''But the level of protection as measured by sum assured to GDP is about 55 per cent relative to benchmarks in developed markets of 150 per cent to 250 per cent,'' said secretary general D S Rawat.

The relentless focus on growing new business premiums has led to several inefficiencies in business practices, he said. Creation of short-term products, incentivisation of front-line managers and agents primarily on new business and limited profiling of customer needs resulted in low levels of profitability.

Between September 2010 and March this year, the industry registered negative growth of 13 per cent in APE. In the private sector, the negative growth was even higher at 32 per cent. In the first quarter of 2011-12, the slowdown continued with the industry registering negative APE growth of 23 per cent and private sector registering negative APE growth of close to 40 per cent.