With
the opening of the market six years ago,
Indian insurance business, which remained
under developed with low levels of insurance
penetration and insurance density has
shown signs of improvement. Opened up
of private sector participation with provision
for limited foreign equity exposure, has
made the industry extremely competitive
and aggressive. Foreign majors have entered
the country and announced joint ventures
in both life and non-life areas. Major
foreign players include New York Life,
Aviva, Tokio Marine, Allianz, Standard
Life, Lombard General, AIG, AMP and Sun
Life among others. With competition, the
erstwhile state sector companies have
become aggressive in terms of product
offerings, marketing and distribution.
The
foreign and private Indian players have
been focused on converting untapped market
potential into opportunities by providing
tailor-made products. The presence of
a host of new players in the sector has
resulted in a shift in approach and the
launch of innovative products, services
and value-added benefits.
The
Insurance Regulatory and Development Authority
(IRDA) have played a proactive role as
a regulator and a facilitator in the sector’s
development. The size of the market presents
immense opportunities to new players with
only 20 per cent of the Country’s
insurable population currently insured.
There
were four public sector and nine private
sector insurance companies operating in
general/ non-life insurance business with
a premium income of over US$ 2.58 billion
in 2003. The insurance penetration i.e.
premia as percentage of GDP was 2.32%
in 2000. The insurance density i.e. premium
per capita was USD 9.90 in 2000.
The
life insurance industry underwrote Individual
Single Premium of Rs.10,99,898.97 Lacs
during 2005-06, of which private insurers
garnered Rs.2,24,590.09 Lacs and LIC garnered
Rs.8,75,308.88 Lacs. The corresponding
figures for the previous year were Rs.590461.13
Lacs for the industry with private insurers
underwriting Rs.101578.32 Lacs and LIC
Rs.488882.81 Lacs. The Individual Non-Single
Premium underwritten during the year ended
31st March 2006 was Rs.19,88,904.29 Lacs,
of which the private insurers underwrote
Rs.6,94,322.40 Lacs and LIC Rs.12,94,581.89
Lacs. The corresponding figures for the
previous year were Rs.1524582.74 Lacs
of which the private insurers underwrote
Rs.386512.42 Lacs and LIC Rs.1138070.32
Lacs.
Group
Premium:
The
industry underwrote Group Single Premium
of Rs.4,40,624.12 Lacs of which the private
insurers underwrote Rs.45,996.35 Lacs
and LIC Rs.3,9 4,627.77 Lacs: the lives
covered being 1,23,29,399; 8,61,391 and
1,14,68,008 respectively. The corresponding
figures for the previous year were Rs.401397.94
with private insurers underwriting Rs.31,125.55
Lacs and LIC Rs.3,70,272.39 Lacs; and
the lives covered being 8707628; 5,65,254
and 81,42,374 respectively. The Group
Non-Single Premium underwritten during
the year ended 31st March 2006 was Rs.60,368.13
Lacs and was underwritten entirely by
the private insurers, covering 28,51,686
lives. The corresponding figures for the
previous year were Rs.36,523.30.07 Lacs
covering 22,45,355 lives.
Segment-wise
Segregation:
A
further segregation of the premium underwritten
during the year indicates that Life, Annuity,
Pension and Health contributed Rs.26,38,529.36
Lacs (73.57% ), Rs.1,54,382.34 Lacs (4.30%),
Rs.7,92,852.43 Lacs (22.11% ) and Rs.736.56
Lacs ( 0.02%) respectively to the total
premium. In respect of LIC, the break
up of life, annuity and pension categories
was Rs.16,95,656.80 Lacs (66.12%), Rs.1,40,275.38
Lacs (5.47%) and Rs.7,28,586 Lacs (28.41%
) respectively. In case of the private
insurers, Rs.9,42,872.56 Lacs (92.26%),
Rs.14,106.96 Lacs (1.38%), Rs.64,266.06
Lacs (6.29%) and Rs.736.56 Lacs (0.07%)
respectively was underwritten in the four
segments.
Unit
Linked and conventional premium:
Analysis
of the statistics in terms of linked and
non-linked premium indicates that 55.22%
of the business was underwritten in the
non-linked category, and 44.78% in the
linked category, i.e. Rs.19,80,433.27
Lacs and Rs.16,06,067.42 respectively.
In case of LIC, the linked and non-linked
premium was 29.76% and 70.24% respectively;
as against which for the private insurers
taken together, this stood at 82.48% and
17.52% respectively.
(Source:
IRDA Journal May 2006)
Therefore
there is huge potential to penetrate the
insurance markets and reach the untapped
population. AGSL can seize this opportunity
and increase its revenue through the distribution
of Insurance products.
