To grow faster, the insurers need capital and IRDAI is planning to enlarge the basket of instruments through which they can raise capital

Life Insurance Corporation has to mobilise almost a total premium Rs 16 lakh crore , HDFC Life Insurance(Rs 2.66 trillion),SBI Life(Rs 2.18 trillion)(ICICI Pru Life (Rs 1.67 trillion) Max Life (Rs 1.20 trillion),Bajaj Allianz Life(Rs 86,000 crore ) ,Tata AIA Life (Rs 77,000 crore )Kotak Mahindra Life(Rs 69,000 crore) by 2027

Aditya Birla Life Insurance assigned Maharashtra, LIC (Assam),HDFC Life(Gujarat), ICICI Pru(Bihar & Manipur),Aviva(Uttrakhand), Bharti Axa (Odisha),Bajaj Allianz Life Insurance(Tripura and Rajsthan), Canara HSBC Life(Delhi and Karnataka),Kotak Mahindra Life(Tamil Nadu and Puducherry), India First Life(Madhya Pradesh),SBI Life(Chhattishgarh)

Hyderabad:

The insurance regulator IRDAI has now set minimum annual premium targets of all life insurers to achieve a life insurance penetration of 6.18 per cent and a total premium of Rs 29 trillion by 2027.

Debasish Panda, chairman, IRDAI, while addressing the life insurance CEOs as part of 2^nd  2–day summit of CEOs of the Indian Insurance industry on Thursday, titled as “ Bima Manthan-the Road Ahead”, has set a stiff annual premium target for each of the life insurers for next five years and wanted the life insurance industry should grow at a much faster speed to improve the insurance penetration and density on the standard of G-7 countries.

It is possible to achieve these targets by growing at CAGR(compounded annual growth rate) 32-33 per cent and some of the life insurers are already growing at that pace. Some of the small life insurers now need to have these aspirational targets to  catch up with other players and larger companies need to grow even bigger way, Panda said.

“The smaller players  must tell us what they need from us to achieve this kind of growth. We are prepared give them dispensations We have set these minimum targets for all the  life insurers on the basis of  their potential and profile, We have already sent you mails on this issue. Those who exceed these targets will be honoured by the IRDAI,’’ added Panda.

Going by the minimum annual premium targets set by the IRDAI, some of the life insurers including Life Insurance Corporation(LIC) has to mobilise almost a total premium Rs 16 lakh crore , HDFC Life Insurance(Rs 2.66 trillion), SBI Life(Rs 2.18  trillion)(ICICI Pru Life(Rs 1.67 trillion) Max Life (Rs 1.20 trillion),Bajaj Allianz Life(Rs 86,000 crore ) ,Tata AIA Life (Rs 77,000 crore )Kotak Mahindra Life(Rs 69,000 crore) by 2027.

To grow, the insurers need capital and IRDAI is planning to enlarge the basket of instruments through which they can raise capital, he said

“We will allow you soon to raise all forms of capital even without IRDAI’s approval,’’ he said

Currently, the insurers are allowed to raise capital through only equity and debts.

“We want all the life insurers give us confidence and commitment on the numbers we have laid out for them. We will be there with them all the time to provide all the supports from our side,’’ he stated.

IRDAI has also  decided to put each of life Insurer in charge of one or more than one states to deepen the insurance penetration in that region.

Aditya Birla Life Insurance has been assigned the state of Maharashtra, HDFC Life(Gujarat), ICICI Pru(Bihar & Manipur),Aviva(Uttrakhand), Bharti Axa Life (Orissa), Bajaj Allianz Life Insurance(Tripura and Rajasthan), Canara HSBC Life(Delhi and Karnataka), Kotak Mahindra Life(Tamil Nadu and Puducherry), India First Life(Madhya Pradesh),SBI Life(Chhattishgarh)

The assigned insurers have to regularly meet with chief secretary of the assigned state along with politicians and other key functionaries of these states to deliberate on the contributions of insurance industry to the development of these states.

“That will create an atmosphere where state government officials and politicians will take more initiatives to spread insurance awareness in the region,’’ explained Panda.

“We have been given Assam, where LIC’s current business is not so good. We will be happy to promote life insurance in Assam,’’ said MR Kumar, chairman, LIC.

The IRDA is also planning launch concerted and continuous campaigns along with life insurers to promote insurance awareness in the country.

“We will involve celebrities particularly from sports to run sustained campaigns over two-three years so that insurance will get embedded in the minds of the people,’’ Panda said.

Also to attract more players into the industry, the IRDAI has decided to simplify the various approval processes.

“`The entire process where  a  prospective player is issued NOC (no objection certificate) so that it can apply for registration from the ROC(Registrar of Companies) has been automated and with guidance documents, we will hand- hold all new players to comply with various regulatory steps. We have cleared applications of 13 players in the last one and half months,’’

 Exhorting the life insurers to adopt efficient claim settlement system and set up their internal ombudsman system, Panda disclosed that the regulator is planning to institute “Claim settlement Index’ for the industry to measure each of the company’s position on the issue.

For Risk Based Capital (RBC), IRDAI has set a slightly longer target of two years while it wants to complete the Risk Based Supervisory Framework(RBSF) in eight  months, Panda disclosed.

“On the basis of supervisory technology(Sup-tech) we would like to customize supervison as we believe  one size doesn’t fit all policy,” he said.

Panda said IRDA hoped amendments to the Insurance Act happened in Monsoon Session of Parliament to relax the entry barriers for the new players in terms of capital and to allow different kind of players.

After the amendments, insurers  can float subsidiaries and offer value added services.