Revised plans for players missing target

The Insurance Regulatory and Development Authority (Irda) is all set to ask insurance players, which have not met their five-year business targets, to submit revised business plans.

"They will need to file a revised business plan," said C S Rao, chairman Irda. He denied that the capital was the sole issue in companies failing to meet their targets, adding that they are all solvent.

Some private insurers could bring in new products to grow their business volumes, such as unit-linked plans or riders, said Rao. Irda's interest in ensuring that insurance companies conform to business targets stems from its keenness to develop and expand the insurance market.

"We have issued licenses to strong players, and would like to ensure that the market develops. Capital is not the only issue. Rather the real problem is marketing of products and a strong marketing force," Rao added.

Since the sector was privatised, insurance penetration has risen from 2.3 per cent in 2000 to 2.88 per cent in 2003. The per capita density of insurance has shot up from $9.4 per cent to $16.4 during the same period, Rao said.