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Despite an uncertain environment, the total premium of life insurance industry increased by 23 per cent to Rs 1,25,254 crore, from Rs 1,01,973 crore for the first six months of the current fiscal.
According to Mr S. B. Mathur, Secretary General, Life Insurance Council, the growth in total premium is due to the increase in new business premium by 60 per cent, backed by the strong performance of Life Insurance Corporation. The growth is all the more noticeable since this period was marked by significant changes in the product profile of ULIPs, and the changes initiated in the first quarter of FY 2010, he said.
The changes made in ULIP polices has resulted in the increase of average annual premium and average sum assured per policy. The average premium per policy for non-single product has increased from Rs 10,233 in September 2009 to Rs 12,887 in September 2010. Single linked premium products have also
shown healthy growth of 123 per cent from Rs 7,732 crore as of September 2009, to Rs 17,267 crore as of September 2010.
Capital infusion
He pointed out that there are 23 life insurance companies in India, and together they have infused more than Rs 30,000 crore of capital as of September 30, thereby emerging as the major contributor to the economic development, especially in infrastructure development. As of September 30, the total assets under management stood at Rs 14,35,206 crore.
The industry, he said, plays a critical role in mobilizing savings, providing risk cover and has played a pivotal role in stabilizing the financial markets. During the global financial crisis of 2008-09, the life insurance industry invested more than Rs 51,562 crore in equity market, when FIIs pulled out approximately Rs 47,000 crore. In 2009-10, insurance contributed approximately 20 per cent of the total gross saving in household sector.
The life insurance premiums generate long term capital which is required to build infrastructure projects which have long gestation period. As of September 30, 2010, infrastructure investment by life insurers stood at Rs 1,44,877 crore, he said.
“While the numbers reflect well, it is better to be cautious about immediate future. Some of the privateplayers might take some more time to get adjusted to the new regulatory framework. However, the overallscenario appears positive and I foresee high growth for the industry to be sustained in the coming years,” Mr
Mathur said.
Source: The Hindu Business Line
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