Despite the economic slowdown, the insurance sector of the country has recorded a substantial growth rate in premiums, as per the data. Former IRDAI member KK Srinivasan said, “In general insurance, in my view, the spurt is primarily because of two reasons: the increase in motor third party insurance rate and the hefty spot penalties by traffic police as per the new Motor Vehicles Act for failure to possess vehicle insurance.”
“The attractiveness of the retail pension (or savings) products with guaranteed returns as against the bank deposits could have been one of the reasons in the life insurance segment,” KK Srinivasan added. Both life and non-life insurance segments saw robust growth in terms of premiums collected till the six-month period ended September 30 of FY20. It comes even as the automobile sector that contributes maximum in terms of premiums to the general insurance sector slowed down substantially. However, extended slowdown may hurt the prospects of the insurance sector in the coming months, the experts also said.
A rise of 35% at Rs 125,758 crore was recorded in the life insurance premium of all 24 players in the April-September quarter of the FY20, according to the Life Insurance Council. In the first six months of the ongoing fiscal the new premium collected by LIC zoomed 42% to Rs 89,980 crore. For the rest of the private sector players, the cumulative premium till September 2019 rose 21 per cent to Rs 35,778 crore, the data showed.
The general insurance industry in September has grown by almost 40% at Rs 19,047 core. The public sector insurers have mopped up a premium of Rs 8,873 crore, up 43% while the private sector companies have mobilised a premium of Rs 10,174 crore, up 37% during September, the data revealed.
