Motor insurance including both ‘ own damage’ and ‘ third party’ categories has maximum share of 44 percent in the general insurance business growth of insurance providers in India. Health & personal accident command second highest share at 26.1 percent while property insurance has 16.1 percent, according to 2014-15 data published in General Insurance Council of India recently. Health and personal accident insurance segment grew at a CAGR of 24.3 percent during the period 2006-07 and 2014-15
The domestic general insurance industry is growing in tandem its global peers with maximum growth seen in personal insurance side.
“ Motor insurance having a high share in the general insurance sector is probably due to the fact that the third-party insurance category of motor insurance is mandatory in India. Third party insurance is needed to compensate for the damages of a third person involved in the car accident where the owner of the vehicle is accountable. The insurance provider to the owner of the car will compensate the aggrieved third person,” explained Deepak Yohanan, Founder & CEO of myinsuranceclub.com.
Both public and private non-life insurers in India have seen significant growth since 2006-07. Insurance penetration (in non-life segment), which is defined as the ratio of premium underwritten in a given year to gross domestic product (GDP), has improved marginally from 0.6 in 2006-07 to 0.7 percent in 2014-15. The overall insurance penetration (general and life) in the country stands at 3.9 percent significantly lower than the world average of over 6 percent.
“ Insurance penetration (both life and general) in India is amongst lowest in the world. Healthcare costs have increased significantly in past some years. Quality treatment of critical illnesses sets the patient or their family back by lakhs of rupees. In this case, people should be proactive in protecting themselves by taking a medical cover and shift the financial risk to the insurer’ s shoulders,” opined Mr Manoj Aswani of myinsuranceclub.com.
Another indicator of industry growth: Insurance density, which is premium per person or per capita premium, has increased three-fold from Rs. 235 to Rs. 686 during the period 2006-07 to 2014-15.
Gross Direct Premium Income (GDPI), which indicates organic growth of the insurer in a given year, more than trebled to Rs 84,686 crores from Rs 26,110 in 2006-07. The number of policies issued has doubled from 6.04 crores to 12.60 crores during the period.
However, rise in the number of employees working in the general insurance sector has not kept pace with the rise in GDPI and insurance density. As opposed to over 300 percent rise in both insurance and GDPI, increase in the number of employees during the period has been mere 27 percent.
Source :- My Insurance Club. Com (Mumbai)
Date :- 29th December, 2015