The size of funds managed by insurers in the country is expected to reach a whopping level of Rs 30,00,000 crore over the next five years, marking a 70 per cent jump from current level, outgoing insurance regulator J Hari Narayan said recently.
When the insurance industry was opened up in 2000, the total controlled fund was about Rs 1,00,000 crore. It was Rs 8,00,000 crore in 2008 and it is Rs 18,00,000 crore now. That is how it grew. After five years, it will be about Rs 30,00,000 crore, Hari Narayan said in an interview.
He said he is in favour of government hiking foreign direct investment (FDI) limit to 49 per cent in the insurance sector, leading to at substantial flow of funds into the capital-intensive sector.
It is estimated the insurance sector would require at least Rs 30,000 crore over the next five years to double its size. The government is yet to announce the successor to Hari Narayan, whose five-year stint as IRDA chief came to an end recently.
Former LIC chairman T S Vijayan’s name has been proposed for heading IRDA but a formal announcement is still awaited. Under Hari Narayan, the Insurance Regulatory and Development Authority (IRDA) has taken several important steps, including guidelines for listing of life insurance companies on stock exchanges, doing away with third-party motor insurance pool and introducing portability of health insurance.
The Indian insurance industry needs to give proper insurance cover for natural disasters and strengthening of reinsurance, IRDA chief said. He said the regulator has submitted an approach paper on insurance cover for natural disasters to National Disaster Management Authority.
There are several things that could be addressed adequately. One is to give a proper insurance cover for natural disasters and catastrophes.
It is recently that I could finish an approach paper that has been shared with the National Disaster Management Authority. So that has to be taken forward. That’s an important area. Secondly, a deeper strengthening of reinsurance products should take place. That’s another one which needs to be done, Hari Narayan said.
Quoting United Nations Environment Programme, The India Risk Survey 2012, by Pinkerton C&I India and Federation of Indian Chambers of Commerce and Industry (FICCI), he said China, India and Bangladesh are ranked first, second and third, respectively, in terms of the number of deaths caused due to natural disasters.
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