The Hindu Business Line : Four new players await IRDA nod

Hyderabad, Aug. 12 The insurance sector is likely to become more crowded, with four companies, which are awaiting approval from the Insurance Regulatory and Development Authority (IRDA), starting operations.

“We cannot share further details on the pending approvals. We have asked for some particulars and the moment they submit them, we will issue R1 licence (the first of three licences required to start operations),” Mr J. Hari Narayana, Chairman, IRDA, told newspersons on the sidelines of a product launch function of Max New York Life Insurance here on Tuesday.

Micro insurance

On the trends in micro insurance, the Chairman said the interest of private players in the segment has been growing. “However, there is still a long way to go as the micro insurance business represents a miniscule in the insurance industry though India can be called a leader in micro insurance,” he said.

In 2007-08, out of total premium of Rs 1,00,000 crore, only Rs 125 crore came from micro insurance, he added,

“Till recently, micro insurance was driven by the Government-led social security schemes. But now the time has come for an independent growth,” he observed.

The insurers should design different, unbundled micro insurance products to cater to the needs of the rural areas, he suggested.

To expand the reach of distribution, the non-governmental organisations (NGOs) should also consider a broking model as against agent model widely adopted currently. “I understand that the costs in broking model are high and we can workout a mechanism to bring them down for NGOs,” Mr Narayana said.

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