Life insurance sector to grow by 15%

India’s life insurance sector is expected to grow by almost 15 per cent in the current financial year and touch a total premium income of Rs 2,55,000 crore (about $ 50 billion).

“Despite the slowdown in economy, the sector has been on a growth trajectory, as the policyholders are realising the value of insurance,” Life Insurance Council secretary general S B Mathur said at a conference call.

The domestic life insurance industry has been on a high growth curve after the sector opened in 1999. Since then, more than Rs 25,000 crore capital has been deployed by the 23 private companies.

Last fiscal, the total premium, including renewal and new business have grown more than eight times to over Rs 2,21,000 crore.

He further informed that the penetration of life insurance sector was also increasing rapidly and the total industry size as percentage of GDP was likely to touch 4.19 per cent this fiscal, up from four per cent in 2008-09.

“Besides, our share in the world premium increased to around two per cent last fiscal, up from half per cent in 1999-00,” he added.

On the recent talk of cap on agent commission, Mathur noted it would only impede the growth of the sector. “Besides, the percentage of agent commission is already crashing and it is almost six per cent of the total premium now as compared to 12 per cent in 1999 due to competition,” he said.