Insurance sector grew 83% after privatisation

The insurance industry has grown by 83 per cent since the opening up of the sector. Remarking on the performance of the insurance industry, C S Rao, chairman, Insurance Regulatory & Development Authority (Irda), said public sector players have not suffered with the opening up of the sector.

Insurance premium income has risen to Rs 82,415 crore in 2003-04, against Rs 45,000 crore in 2000-01. Rao expects premium income in the life insurance sector to rise further by 15-16 per cent and non-life insurance premium by 14 per cent in 2005-06. The growth comes on the back of healthy demand from the manufacturing sector.

"There has been no reduction in growth rates as seen in the case of the Life Insurance Corporation of India (LIC). It is able to hold on to its existing share in terms of business growth. Market share is bound to stand reduced as some business goes to the private players," said Rao.

The health and personal line segments are expected to see maximum growth during the current financial year.

"The health insurance sector is expected to grow by 10-15 per cent," Rao said at a one-day seminar on 'Growth of Insurance Industry in India' organised by the Indian Merchants' Chamber (IMC) in Mumbai today.

If the cap on foreign direct investment is increased to 49 per cent from the current 26 per cent, the industry can expect greater entry of players. But this, said Rao, should not be seen as a threat to public sector players.