Page 40 - Life Insurance Today March 2018

AUM touches Rs. 50,000 Life insurance sales in India surge to Rs 4.18 lakh crore

crore: Max Life Insurance Life insurance sales in India grew 14% year-on-year to Rs 4.18 lakh crore from
Rs 3.66 lakh crore, according to latest data from IRDAI.
Assets Under Management (AUM) Non-life insurance saw whopping 31% growth to Rs
of Max Life 1.30 lakh crore. Insurance density in the general insur-
Insur ance ance sector also improved to 13.20% in 2016-17 from
have touched 11% in 2013-14, while life insurance density grew to
the Rs 46.5% in 2016-17, from 41% three years ago.
50,000-crore
point after it experienced rise in In comparison to other countries, insurance density - measured as ratio of pre-
CAGR by 29.5% over the last 3 years. mium (in US dollars) to total population -- India fared poorly, compared to other
For full-year 2016-17, Max Life re- countries. In terms of insurance density, India has a coverage of $46.5 for ev-
corded first-year premium growth of ery citizen, far below China ($189.9), Thailand ($222), Brazil ($195.5), South
27% to Rs 3,666 crore and total Africa ($615), Japan ($2,803), UK ($3,033) and US ($1,724).
gross written premium increased When it came to life insurance penetration, India with 2.74% rolled past China
17% to Rs 10,780 crore. (2.34%), Sri Lanka (0.52%), Brazil (2.28%) and Russia (0.25%) for the year ended

"We have almost doubled our AUM March 2017. Countries like Taiwan (16.65%), Hong Kong (16.20%), South Af-
and the credit goes to our team of rica (11.52%), United Kingdom (7.68%), France (6.06%) were ahead of India in
analyst and fund managers, who terms of insurance penetration - measured as a ratio of premium to GDP - while
have deep understanding of various Australia (2.99%), US (3.02%) were nearly on par.
industries and asset classes to take In life insurance, India's total first premium collected increased 27% to 1.75
the most appropriate long-term in- lakh crore from 1.38 lakh crore. The number of policies issued, however, dipped
vestment decisions," said Rajesh slightly to 265 lakh from 267 lakh. In general insurance, motor and health con-
Sud, vice-chairman and managing tinued to be the biggest contributors to sector growth.
director, Max Life Insurance.
Of total gross direct premium generated for 2016-17 of Rs 1.28 lakh crore,
"In recent years, we have created in- motor contributed Rs 50,250.53 crore (40%) and health contributed Rs 34,526
vestment capabilities in specialised as- crore (27%). Premium from other segments contributed 24% (Rs 30,895.72
set classes such as real estate, alter- crore) primarily because of the growth of crop insurance.
nate investment funds, additional tier-
1 bonds and infrastructure investment "According to a Mckinsey study India spends 4% of its GDP on health care. Of
trusts.... Max Life Insurance is also the this roughly 9% is financed by insurance arrangement, 30% is financed by public
first life insurance company to use expense (Government and NGO's) and rest 61% is self financed. This level of
fixed-income derivatives to hedge self financing is bound to have negative consequence," said Pankaj Nawani, VP,
guaranteed product," said Sud. Max Life Insurance Co. "Last decade and a half has seen very rapid expansion
of health insurance coverage in India. In 2003-04 the total premium for health
Bajaj Allianz eyes ULIPs insurance in India was Rs 1,370 cr ore which has risen in FY 2016 to Rs 21,000
crore. This is a CAGR of nearly 30%, making health insurance the fastest grow-
to boost sales ing segment in the Indian Insurance sector."
Private insurer Bajaj Allianz Life In-
surance Company is expecting that (Edited excerpts from the report 'Strengthening the life insurance industry in
the share of Unit Linked Insurance India by mitigating financial crime risks', from Fraud Investigation & Dispute
Services, EY India)
Plans (ULIPs), as a proportion of its
total sales, will increase in the com- Paytm to launch life and general insurance companies
ing years, said an official.
Paytm has established two new entities to cater to insurance, months after get-
"The overall sale of ULIPs is likely to
ting a corporate agency license from Insurance Regulatory
gain pace for the industry and we
Development Authority of India. The two new entities,
expect it to grow relatively faster for
named Paytm Life Insurance Corporation Ltd and Paytm
us depending on how the markets
General Insurance Corporation Ltd, were incorporated on
perform," said company's Chief In-
February 21, as per filings with the Ministry of Corporate
vestment Officer Sampath Reddy.
Affairs.
40 March 2018 Life Insurance Today