 "Average life insurance premium still at Rs 13,000 p.a.: SB Mathur")
Life insurance premium in India still stands at Rs 13,000 annually, said SB Mathur, member (part time) at Insurance Regulatory and Development Authority (Irda). Expressing concerns at the dismal growth of life insurance in India, Mathur explained that new initiatives like relaxation of pass percentage of agents would be beneficial to the industry.
Speaking at the Insure India Summit organised by Fintelekt, he said that there has been a 15-16 % decrease in new premiums for individual segment in the last two years. "Life insurers would have seen a further de-growth in new premiums, had there not been group business. In fact, group accounts for about 42% of new premiums," he said.
Emphasising on the need of proper infrastructure to push premium growth, Mathur said that setting up of new offices could address this issue. However, he said that mandatory opening of offices will be a strain on expenses of insurers.
In his budget speech, finance minister P Chidambaram had asked state owned insurers to ensure that all towns with 10,000 and above population have an insurance office. Under this initiative, Life Insurance Corporation of India (LIC) has been asked to open 1800 new offices in those towns during this fiscal.
Mathur also raised the issue of increase in expenses of insurers. He informed that while commission expenses, on an average, was up by 7%, new premiums were down by 7%.
Life insurance companies are approaching the July 1 deadline for introduction of group products compliant with the new traditional product norms. The deadline for refiling individual products is September 30. About 80 % of products of insurance companies would have to be refiled to meet their requirements.