The domestic insurance sector is expected to grow this fiscal, after being in negative territory last year.

“Despite concerns of inflation and other economic factors, we are expecting growth for this sector this year. Between April and July, the growth in new premium collection has been about 17 per cent year-on-year. But to maintain this level for the whole of the year will be challenging,” J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority (IRDA), said.

Last fiscal, the sector had shrunk by two per cent.

Asked about the reported move by the Finance Ministry to double the exposure limit of insurance firms in a company from 10 per cent, the IRDA chief said this could be fundamentally flawed.

“The focus of insurance companies and pension funds should be on stability and prudence, considering the risk involved in large equity exposures. In any case, the Act has to be amended to pave the way for this (move),” he told media persons here on the sidelines of the convocation of the Institute of Insurance and Risk management.

Earlier, IIRM Managing Director Vepa Kamesam said despite the gloomy economic conditions, over 50 of the 74 diploma-holders of the 2011-12 batch of the institute had got placement on reasonable scales, apart from off-campus placements.

“Corporates, insurance companies and banks have offered placements to our diploma-holders on an annual salary ranging between Rs 3 lakh and Rs 6 lakh. It is observed that some of the students have declined some offers as they were choosy. Such candidates run the risk of delays in securing employment,” he said.

Speed up reforms

G. N. Bajpai, former chairman of Life Insurance Corporation and SEBI, said the agenda for India should be to speed up pending reforms in sectors such as insurance and banking, apart from revving up second-generation reforms. He pointed out that the Indian economy had been “invaded” by inflation and current account deficit.

(This article was published on September 20, 2012)
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