Nepal Life Insurance

Indian insurance market: private sector trying to be in parallel with the government companies

प्रकाशित मिति: १४ कार्तिक २०७४, मंगलवार १२:५३

सागर चन्द

Beemanews

Oct 31-Kathmandu.

India is believed to have started the idea of insurance in South Asia. With the establishment of an English insurance company, oriental life insurance in 1898 AD in India, the modern history of insurance starts in India. However, this English company was supposed to be failed to come towards the end of 1934. After that, it was not the case that various companies didn’t try to operate this business in India. The colonized India is however seen to have made some significant climb towards the end of 19th century through the English company. Coming to 1914 AD, Indian Government started publishing the particulars of Indian Insurance companies, thereafter, Insurance Act, 1912 was promulgated. Likewise in India, Non-life insurance was started by Triton insurance company. Established as the first non-life insurance company in India in India, it gained permission to operate in all business of non-life insurance.

Present state

Indian insurance market is rising as biggest insurance market of South Asia. The internal life insurance market, in 2015/16, was able to collect a premium of 20 billion, 3 hundred 40 million us dollars, attaining 22.5 % of annual increment. Having the market of 68 billion 8 hundred and 80 thousand in 2016, the Indian government has even declared publicly to take this market to 2 hundred 80 billion of the market.

Indian  Life Insurance Market

In 2015/16, out of total premium collected worldwide, life insurance premium was 55.6%. Indian Life Insurance had occupied 79% of total premium collected. Remaining 21% was of non-life insurance. An organization named Swiss re-announced that as per the survey of life insurance among 88 nations, India lies in 10th position in collecting premium. As per its another survey, Indian life insurance market occupied 2.24% of total life insurance market in 2015. By the end of 2016, there are 54 insurance companies operating in India. Out of them, 24 are dealing in life insurance business and 24 are in non-life insurance. In India, only 5 companies operate in Health insurance. There is only one reinsurance company in India.

Out of 54 insurance companies, 8 are government owned and 46 are operating on private investment. LIC is the only life insurance company operating under governmental sectors investment. Other 6 are non-life insurance company, operating under governmental sector’s investment. Similarly, India’s only one reinsurance company is government owned.

The Indian life insurance market is expected to increase from 12-15% in 2016/17. The collection of the premium is expected to increase from 12-15% in a current financial year.

Indian life insurance company collected a premium of  3 lakh 66 thousand, 9 hundred and 43 point 23crore of Indian rupees. This sum was 11.84% higher than a previous financial year of 2014/15. On 14/15, Indian Life insurance company had collected a premium of 3 lakh 28 thousand, 1  hundred and 2 crores of Indian rupees premium.

In the collection of premium, private sectoral life insurance companies attain a growth rate of 13.64%, while government-owned, one and only LIC attained 11.7 % as per the statistics.

Taking the base of the total premium, in 2015/16 the market share of government-owned LIC reduced from 73.05 to 72.61 %. On the hand, the private sector life insurance company’s market share increased from 26.95% to 27.39%. In 15/16 Indian life insurance company issued policy of 2 hundred 67 points 38 lakhs. This was higher than the previous year by 3.20 %. Private sector issued a new policy of 61.52 lakhs. Out of total issued policy, 7.92% policies are of private insurance companies. Government-owned life insurance companies have issued a new policy of 2 hundred 5point 47 lakh which was 1.36% higher than the previous year.

Up to 31 March 2016, the total paid-up capital of Indian life insurance company is 26 thousand 5hundred  91 points 47 crore Indian rupee while government-owned companies do have 1 hundred crores Indian rupee.

Likewise, Indian life insurance company has gained a paid profit of 2 lakh 17 thousand 66 points 10 crore Indian rupee in 15/16. This sum is 54.99% of the total insured sum. As a whole, Indian Life Insurance Company had gained a profit of 7thousand 4hundred 14point 97crore Indian rupee in 15/16. In 14/15, 24 life insurance companies had 11 thousand 33branches in 15/16 while in 15/16, this number increased to 11thousand 71. Although this number increment is not material, the practice of cutting off the number of the department has however been ended. Among 11thousand 71branches, government-owned insurance company LIC has 6thousand 1hundred 79branches while remaining 23  private sector company have 4 thousand 8 hundred 92branches.

Observing the investment status of Life Insurance sector in 2003, out of 11 billion  5 hundred million thousand us dollar investment, government sector had 98% of the investment. Among it, the private sector had only 2% of the investment. But, coming to 2016, even though there was not a material change, private sector investment has however increased.Presently, out of 61billion, 7 hundred eighty thousand American dollar investment, private sector investment is  27.84%. Remaining 72.16% is of government-owned.

The Indian life insurance market is expected to increase from 12-15% in 2016/17. The collection of the premium is expected to increase from 12-15% in a current financial year.


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