Life Insurance

Life Insurance - FEB 2010

The US$ 41-billion Indian life insurance industry is considered the fifth largest life insurance market, and growing at a rapid pace of 32-34 per cent annually, according to the Life Insurance Council. Since the opening up of the insurance sector in India, the industry has received FDI to the tune of US$ 525.6 million. The government is likely to reintroduce the Insurance Bill which proposes to increase the FDI cap in private sector insurance companies from 26 per cent to 49 per cent.

The total number of life insurers registered with the Insurance Regulatory Development Authority (IRDA) has gone up to 23, with registration of the India First Life Insurance Company Limited, a joint venture life insurance company promoted by Bank of Baroda and Andhra Bank, India and Legal & General Middle East Limited, UK. The Life Insurance Corporation (LIC) posted a 50 per cent growth in new premium collection in the first nine months of the 2010 fiscal, increasing its market share to 65 per cent from 56 per cent a year ago.

LIC’s new premium collection touched US$ 9.58 billion in the April-December 2009 period while the combined business of the 22 private insurers grew to US$ 5.07 billion from the previous year, as per data collated by the Insurance Regulatory and Development Authority (IRDA). Overall the industry grew at 29 per cent in the April-December period of the fiscal year 2010.

The life insurance industry had earlier been expected to grow by 15 per cent in the 2010 fiscal year and cross the US$ 54.1 billion mark in total premium income by the end of March 2010, according to industry body, Life Insurance Council.

However, industry experts now believe that India's life insurance industry is likely to grow by around 10 per cent in 2010 over the previous year, mainly due to increased efficiency but also due to expansion in small towns and villages.

In order to support the aggressive growth in premium income in the current financial year, Future Generali India Life Insurance (a joint venture between the Future Group and the Italy-based Generali Group) has proposed to infuse an additional equity of US$ 32.55 million before the end of March 2010.