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C.R. Sukumar

`Linked' policies most popular

Hyderabad , Aug. 15

Surpassing all expectations and creating a record of sorts globally, the Indian life insurance industry has witnessed a spectacular growth in new business, which has nearly doubled during the fiscal ended March 31, 2006.

The new business recorded a premium income of Rs 49,474 crore during 2005-06 as compared with Rs 25,316 crore in the previous fiscal. The growth in new business of Rs 24,158 crore translates into a growth rate of 95.4 per cent, which is being considered a record for the life insurance industry in any part of the world.

Further, recording another huge achievement, the domestic life insurance sector has brought into its ambit over 9.2-million persons during the fiscal under review.

Investment interest

According to industry analysts, the growth was mostly fuelled by products with inherent investment appreciation. The main contribution for the growth came from individual sales that touched Rs 44,466 crore during the year compared with Rs 20,938 crore in 2004-05. As against a growth of a meagre Rs 6,332 crore in 2004-05, the individual life premium for new business grew by Rs 23,528 crore during the fiscal under review.

The `linked' policies that captured consumer imagination, particularly the individual segment, reported a premium of Rs 29,164 crore during the fiscal 2005-06 compared with Rs 7,981 crore in the previous fiscal.

The former Chairman and Managing Director of Oriental Insurance Company, Mr G.V. Rao, said, "The `linked' policy concept is expected to become even more popular an instrument of life-cum-investment cover for future growth.

Impressive show

As per the provisional and unaudited results released by IRDA for non-life sector, the market premium grew by 16.6 per cent during 2005-06 as compared with 12.6 per cent in the previous fiscal. The cumulative gross premium underwritten by the non-life players stood at Rs 20,421.16 crore during financial year 2006 as against Rs 17,530.68 crore in 2004-05.

Fire premium grew to 13.6 per cent from a meagre 5.37 per cent in 2004-05. While the motor premium grew yet again by 16 per cent, health premiums grew from an already high 28.6 per cent in FY05 to a higher growth of 35 per cent in FY06, and covers titled `all others' grew from 12.6 per cent to 16.5 per cent during this period.

The only disappointment was the marine segment that grew by 3 per cent as against 9.75 per cent in the previous fiscal.

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