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Chief executive and actuaries of the 24 life insurance companies had a meeting on Thursday with T S Vijayan, chairman of the Insurance Regulatory and Development Authority (Irda). It was his first meeting with heads of this segment of the sector after becoming the head of Irda, in late February.
Officials said the discussion centred around the slowing growth of the life insurance segment and what to do about it. The meet discussed the traditional product guidelines and procedures in implementation, new pension norms and means of expanding portfolios.
Vijayan discussed what needs to be done to boost insurance penetration and density. Insurance penetration, measured as the percentage of insurance premiums to gross domestic product, was 4.1 per cent in 2011, compared to 5.1 per cent in 2010. Further, India reported a fall in insurance density for the first time in 2011. The figure fell to $49 (Rs 2,695 approximately) in 2011, from $55.7 (Rs 3,063) in 2010. Insurance density is calculated as the ratio of premiums to population (per capita premium).
“While no major regulatory decision was taken in the meeting on Thursday, the Irda chairman was offered different perspectives on the issues concerning the industry. The meeting helped him to get an overview of our concerns and the steps that need to be taken for it to be resolved,” said an official who attended.
The insurance sector overall has seen a slowing in terms of penetration and density. The life insurance segment has seen a tougher period, with a dip in new business premiums, of 6.3 per cent for 2012-13.
Recently, the new Irda chairman also held a meeting with general insurers, to discuss issues pertaining to that segment. Vijayan had discussed matters such as the discounts that companies give for fire insurance and high losses in the motor segment.
Further points of discussion included the need to raise rates in the third-party motor insurance area. Irda had recently done so but insurers have maintained this was not enough.
TOUGH TIME
* Insurance penetration, measured as the percentage of insurance premiums to gross domestic product, was 4.1 per cent in 2011, compared to 5.1 per cent in 2010
* India reported a fall in insurance density for the first time in 2011, to $49 (Rs 2,695 approx.) in 2011, from $55.7 (Rs 3,063 in 2010)
* The life insurance segment has seen a dip in new business premiums, of 6.3 per cent for 2012-13
