Life insurance business on the slow growth path: IRDA
13 January 2014
The growth of insurance business has seen a slowdown since the financial year 2010-11 against the high growth recorded till 2009-10, on account of a slowdown in life insurance premium, reflecting the slow growth of the economy, the Insurance Regulatory and Development Authority (IRDA) said in its annual report for 2012-13.
During the first decade of insurance sector liberalisation, the sector has reported consistent increase in insurance penetration from 2.71 per cent in 2001 to 5.20 per cent in 2009, the report said.
However, since then, the level of penetration has been declining and reached 3.96 per cent in 2012, it added.
Life insurance penetration had consistently gone up from 2.15 per cent in 2001 to 4.60 in 2009, before slipping to 4.40 per cent in 2010, 3.40 per cent 2011 and further slipping to 3.17 per cent in 2012.
The insurance penetration of the non-life insurance sector in the country has remained near constant in the range of 0.55-0.71 per cent over the last 11 years, however the penetration rose to 0.78 in 2012.
Meanwhile, the IRDA had imposed a fine of nearly Rs5 crore on 12 insurance companies, including market leaders HDFC Life and ICICI Prudential Life, during the 2012-13 financial year.
The highest penalty of Rs1.47 crore was imposed on HDFC Life, followed by R1.18 crore penalty imposed on ICICI Prudential Life for failure to comply with various provisions of the Insurance Act 1938.
PNB Metlife had to pay Rs76 lakh for violating various guidelines, while Tata AIA paid Rs49 lakh in penalties during 2012-13.
The insurance sector regulator had also imposed penalties on 10 life insurance companies and two non-life insurance companies for non-compliance of various regulatory stipulation,
Apart from monetary penalty levied on insurers, penal actions were also initiated on various non-compliant intermediaries as well, according to the IRDA report.