General insurance industry eyes 23% growth in 2008-09
May, 31st 2008
The general insurance industry is slated to touch Rs 50,000 crore premium income in the next five years against Rs 28,130 crore achieved in 2007-08. In 2008-09 the first full year of the detariffed regime state-owned general insurance companies are targeting a total premium income of about Rs 20,000 crore, a 23% growth, against Rs 16,259 crore achieved in 2007-08.
New India Assurance, the largest general insurer, expects a 10% growth to about Rs 5,800 crore in 2008-09, while United India Insurance has pegged it at Rs 4,200 crore against Rs 3,739 crore achieved in 2007-08. Both National Insurance and Oriental Insurance are hoping to garner a total premium income of Rs 4,500 crore each in 2008-09 against Rs 4,032 crore in the previous fiscal.
However, in a bid to facilitate growth, a slew of measures need to be taken. These include tax breaks like removal of service tax on health insurance and personal accident policies, encouragement for growth of individual agents including removal of sealing on commission as well as freedom of policy designing, said M Ramadoss, chairman and managing director, Oriental Insurance Company.
He was talking to media persons at the sidelines of an Insurance Conclave organised by Ficcis eastern region council. Mr Ramadoss added that the industry should concentrate in facilitating insurance skill development and offer more liberalised norms for creation of intermediaries.
Additionally, some regulations for the health service providers should be introduced to enable orderly growth in the segment. In a bid to achieve these, the relevant portion of the Insurance Act of 1938 also needs to be amended, he added.
V Ramasaamy, chairman, National Insurance, who was present, said: Total premium is only a small 0.61% of GDP and penetration of general insurance business is low. However, detariffing will lead to introduction of new innovative products and the huge untapped market will be targeted soon.
Mr Ramasaamy, however, believes that in the near future growth in fire and engineering may not be encouraging, while the insurance industry will concentrate more on retail and micro insurance in rural areas, too.
Products development will eventually be more customer need-based. On the distribution front, present channels will be broad based and new channels like tele-marketing, co-operative banks, RRBs, micro insurance agents, NGOs, travel agents will widen.
Talking about health insurance, Mr Ramasaamy said demand from the segment is rising and is likely to reach Rs 40,000 crore by 2020. It is expected to grow at 35% for the next five years.
Talking about the recent past, G Srinivasan, chairman, United India Insurance, said: Though in absolute terms the growth seems large, but the sector has not outperformed growth in the Indian economy.