Insurance business in India is expected to reach Rs 4 lakh crore in the current financial year, according to Insurance Regulatory and Development Authority (Irda) chairman T S Vijayan. The total premium collected by general and life insurance industry stood at Rs 3.75 lakh crore last year.
"Both the general and life insurance sectors have been doing well in recent months. I expect the total business this year would be anywhere near the Rs 4 lakh crore figure," he said recently here while responding to a question on the insurance sector scenario.
Addressing the convocation ceremony of the Institute of Insurance and Risk Management (IIRM), Vijayan said insurance penetration in the country had a potential to rise to 5-6 per cent from the present 3.86 per cent level in the short-term.
The regulator has initiated various steps to transform insurance policies, which essentially fall into the category of 'push product' into a 'pull product' by making them more relevant to the needs of the policy holder, according to him.
A push product is marketed to a customer having no desire to either purchase or learn about it while the pull product is something that the customers seek out.
The Irda chairman disclosed they had already cleared close to 370 new products, about 90 per cent of those filed by the insurance companies under the new product guidelines that came into force this month. A three-month window was given to the companies to withdraw all the old products as a transition period where both old and the new products coexist temporarily .
On the distribution front, the insurance regulator has initiated reforms, such as appointing banks as brokers so that they can sell the products of more than one insurance company, as part of the efforts to encourage growth of the industry, he said.
The insurance regulator is also contemplating reforms in distribution of insurance policies, such as appointment of bank as a broker to facilitate.
No move to make disgitisation mandatory
Vijayan said there were no plans to make digitisation or dematerialisation of insurance policies mandatory. Last month, the insurance regulator had appointed five insurance repositories to provide service for keeping the insurance policies in electronic format by the policyholders. Union Finance Minister P Chidambaram, while welcoming the move, had asked the regulator to make digitisation mandatory for quick execution of the programme.
