General insurance penetration on the rise

General insurance penetration on the rise

Last Updated: Fri, Nov 29, 2013 04:12 hrs
​life insurance

General insurance penetration, expressed as percentage of gross domestic product (GDP), has gone up to 0.73 this year from 0.70 in 2011-12.

The maiden yearbook on the Indian non-life insurance industry by the General Insurance Council said insurance density (per capita spend on insurance) had increased to Rs 571 in 2012-13 from Rs 158 in 2003-04. The insurance penetration was 0.62 in 2003-04.

In terms of premiums, the gross direct premium income (GDPI) has grown from Rs 17,357 crore in 2003-04 to Rs 69,070 crore in 2012-13. The motor insurance segment accounts for the largest share of GDPI (46 per cent), followed by health insurance (26 per cent) and property (fire and engineering) insurance (14 per cent).

During this period, the number of policies has seen a jump: It increased from 47.7 million in 2003-04 to 109.5 million in 2012-13. In the four-year period ending 2012-13, the number of customer complaints decreased by 58 per cent from 1,86,615 to 78,927.

There were 78,927 registered non-life complaints for 2012-13, compared to 93,155 complaints in 2011-12. Public sector general insurers accounted for 18,616 complaints in the year, while the rest were reported among private general insurers.

In the non-life sector, policy-related complaints topped the list, accounting for 29,101 of the total complaints. Motor segment followed by health accounted for maximum complaints in the non-life sector.

In motor too, delay in claims settlement and dispute on quantum of claim were some of the complaints.

With respect to the number of employees in the industry, the yearbook said while the average number of employees per office had decreased from 17 in 2003-04 to 12 in 2012-13, the average number of policies handled by an office has increased from 10,420 to 13,635 during the same period.

Among the channels of distribution, individual agents followed by direct business contributed the  maximum percentage of GDPI.

Though motor insurance has been growing at a healthy pace, the yearbook showed less than half of the total two-wheelers and taxis plying on Indian roads are insured. As of March 31, 2011, only 27 per cent of the registered two-wheelers, 29 per cent of registered taxis and 73 per cent private cars, were insured. This is despite the fact that third-party motor insurance (covering the liability of third party during accidents and other incidents) is mandatory in India.

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