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. Total premium collected by the general and the life insurance industry stood at Rs 3.75 lakh crore last year.
"Both the general and life insurance sectors are doing well in recent months. I expect that the total business this year would be any where near Rs 4 lakh crore figure," he said on Tuesday while responding to a question on the insurance sector scenario.
Earlier addressing the convocation ceremony of the Institute of Insurance and Risk Management(IIRM), Vijayan said the insurance penetration in the country has a potential to rise to to 5-6% from the present 3.86% level in the short term. The regulator has initiated various steps to transform insurance policies, which are essentially fall into the category of 'push product' into a 'pull product' by making them more and more relevant to the needs of the policy holder, according to him.
A push product is a product marketed to a customer having no desire to either purchase or learn about it while the pull product is some thing that the customers seek out.
The IRDA chairman disclosed that they have already cleared close to 370 new products, about 90% of those filed by the insurance companies under the new product guidelines that came into force from this month. A three month window was given to the companies to withdraw all the old products as a transition period where both the old and the new products coexist temporarily according to IRDA chairman.
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 the growth of insurance industry in the country, 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 the 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 the digitisation mandatory for quick execution of the programme.