Page 6 - Life Insurance Today January 2018

industry is optimistic that it can sustain its high growth difference between the public and private sector
momentum for the rest of this financial year ending March companies.
2018 (FY2018), after posting a 21.95% growth in gross
direct premium underwritten in the April-June quarter. The Privately held general insurers chalked up gross premium
nonlife sector reported gross direct premium of INR333 income of INR 150 billion in the April-June quarter, an
billion (US$5.2 billion) in the first three months of FY2018 increase of 28% over the corresponding period last year.
compared with INR273 billion for the corresponding Standalone private health insurers' gross direct premium
quarter last year. income underwritten stood at INR 14.5 billion in the April-
June period, which was a growth of 44% per cent from INR
The industry believes that a 20% growth can be 10.1 billion in the year ago quarter. In all, privately held
sustainable even in the coming years. The central insurers had a market share of 49.4% in 1QFY2018, higher
government's focus on crop insurance and the growing than the 45.1% seen for the corresponding quarter last
flow of household savings into financial assets would also year.
contribute to growth. The
data show that state-owned
general insurers, including
governmen t - owne d
specialised insurers, reported
gross premiums of INR168.6
billion for 1QFY 2018, an
increase of 16% over the
corresponding quarter last
year. This represented a
market share of 50.6%, down
from 54.9% previously.

Industry participants are
hopeful that even this year the industry would register Ease of doing business:
growth of 18-20%. Though growth has been in the range
Insurance Laws (Amendment) Act, 2015 provides for
of 15-20% in the first six months of the current fiscal and
growth has been coming mainly from motor and health enhancement of the Foreign Investment Cap in an Indian
Insurance Company from 26% to an Explicitly Composite
insurance, when there will be renewal for crop insurance
Limit of 49% with the safeguard of Indian Ownership and
in next few months, the industry will see higher growth.
Control. Insurance penetration of India i.e. Premium
The general insurance sector has received around Rs
collected by Indian insurers is 3.44% of GDP in FY 2015-
22,000 crore from crop insurance and this financial year
16. Per capita premium underwritten i.e. insurance density
industry players are hopeful that the number will be
in India during FY 2015-16 is US$ 54.7. The reasons that
around Rs 32,000-35,000 crore from crop insurance.
the insurance sector in India is under-penetrated and
In the years 1017-18, general insurance industry will see inadequately penetrated are: lack of awareness, low level
crop insurance and health insurance emerging as among of financial inclusion, and lack of trust in the system.
the most important categories. Also, fire and motor
insurance will continue to remain focus for general In addition, the support system is over-regulated and cost
insurance industry. Public Sector companies have a bigger of compliance is high. Regulations are about input policing
reliability factor because of them being under the control rather than being outcome based. The essential and pre-
of the government. Even though the basic product remains requisite "Ease of Doing Business" framework has not been
the same, it is very difficult to actually find a drastic installed with vigour. The approach to public accountability

“I am thankful for all of those who said NO to me. It’s because of them I’m doing it myself.”

6 January 2018 Life Insurance Today

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