Finance Minister P Chidambaram today asked public sector general insurance companies to improve their market share from 53 per cent currently.
Public sector general insurance companies should ensure that no further market share is lost and the current level of 53 per cent is maintained and steadily improved upon, Chidambaram said during a review of insurance firms here.
Besides, the Finance Minister evaluated the status of recent initiatives and the road map for growth, according to an official statement.
There were deliberations on the need to set up institutional arrangements for investigation and prosecution of insurance fraud and create a legal basis for it through amendments to statutes.
"Broadly, progress was discussed...Some issues still pending are to be addressed. So basically their performance was reviewed," Financial Services Secretary G S Sandhu said after the meeting.
According to the statement, public sector general insurance companies have shown a growth of 10 per cent in gross premium during 2013-14 and projected a 100 per cent increase in the next five years.
Expressing satisfaction over Life Insurance Corporation of India's growth, the Finance Minister stressed the need to study the persistency for ULIP (unit-linked insurance plan) and non-ULIP policies separately and to pointedly undertake focused efforts for each category.
Persistency refers to the measure of how long a policy remains in force.
LIC posted a growth of 18 per cent growth in first-year premium (FYP) income during 2013-14 as against 11.57 per cent for the life insurance segment as a whole, it said.
LIC increased its market share by FYP by 3.97 per cent to 75.33 per cent in 2013-14, it said.
It was noted that while the persistency of life insurance policies during 2012-13 has improved for the initial post-subscription years, it remains a challenge to maintain them in the later years.
Chidambaram stressed the need to enhance insurance penetration and density to attain global levels in a reasonable time frame through greater outreach and access.
Settlement of motor third-party claims through Lok Adalats was identified as a major focus area in the 2013-14 Budget. It was noted that a settlement ratio of 50 per cent of cases referred was achieved through mega Lok Adalats, it said.
The minister advised conduct of Lok Adalats in coordination with state legal service authorities to increase the settlement ratio.
Submissions made by companies on tax issues would be looked into and taken up suitably with the authorities concerned, it said.
