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Headline : PM's crop cover pushes insurance penetration past 1% in FY17
 
News Date : Oct 01, 2017
Source : AIP News Bureau
 
General Insurance Council believes that the industry may cross the business at Rs 1.5 trillion by March , 2018

Mumbai:


Driven by the Prime Minister’s Fasal Bima Yojana, the Rs 1.27 lakh crore  non-life insurance industry has crossed the much aspired magical figure of 1 per cent penetration in terms of GDP in FY2017, 



After hovering around 0.7-0.8 per cent for several decades, the penetration ratio of non-life insurance industry has moved up to 1.04 per cent in March 2017, based on the revised GDP figure.



As per the Central Statistical Office, real GDP grew to Rs 121.9 trillion in FY17, a growth of 7.1 per cent over Rs 113.81 trillion in FY16.



As per data collated by the industry body General Insurance Council, the general insurance industry with 33 players had recorded a gross premium of Rs 1.27 trillion in 2016-17, up 33 per cent from Rs 96,000 crore in FY2016



The gross premium of the general insurance industry in 2016-17, driven mainly by Rs 21,000 crore premium coming in from Prime Minister Crop Insurance Scheme has finally pushed up the penetration of the industry to 1.04 per cent from 0.85 per cent in FY2016.



Breaching the 1 per cent milestone sets the stage for interesting times, Sanath Kumar, chairman and managing director National Insurance which is gearing up for an IPO this fiscal year, has also been indexing steady growth of double-digit for the past year.



"While the growth opportunities are plenty, we have been calibrating business growth with our capital/solvency ratios and this has been a limiting factor," Kumar said.



ICICI Lombard chief executive Bhargav Dasgupta said crossing the 1 percentage penetration may be a big news now but we have miles to go as we are still far behind the global average of 3 per cent.



Still, the industry feels that as a market it is still highly underpenetrated market.



"Various government schemes like RSBY, crop insurance scheme, and PMSBY helped the sector cross the 1 per cent-mark penetration mark. Still I do believe there is scope to double this to 2 per cent over the next five years but that will be possible only if the government support continues," said M Nagaraja Sarma, United India chairman.



The General Insurance Council believes that the industry may cross the business at Rs 1.5 trillion by March. "Based on revised GDP figures, the industry has become a significant contributor to both, financial services sector and overall GDP growth," R Chandrasekaran, secretary general of the Council said.



"We are confident if the untapped potential is tapped, the industry's contribution to the economy will further increase," he said and hoped that the industry will cross the Rs 1.5-trillion mark this fiscal-end driven by segments like crop insurance and personal lines of business like motor and health,’’ said Chandrasekaran.



Chennai-based United India Insurance, which may also launch an IPO next fiscal, is focusing on strengthening its agency channel to increase its business.




While the company has come out of the bad times, he said they have to shore up the capital base and the forthcoming IPO and the number of strategies it has adopted will it improve the capital base.



"We are having the largest agency force with 65,000 agents at present which include around 50,000 active agents. We plan to add 10,000 more agents this year," said Sarma.


 

 
 

 
 

 
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