| Huge boost to sector if insurance Bill is passed |
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Mumbai, 30 December The Insurance Laws ( Amendment) Bill, which has been passed through the Ordinance route, will shape the course of the insurance industry in the next year. The year 2014 was marked by structural changes for traditional insurance products, guidelines for which were implemented from January. Besides this, the stock market growth also bought the unit- linked insurance products ( Ulips) back into focus. While this led to premium growth for some life insurers, overall industry growth remained muted, with players like Life Insurance Corporation of India ( LIC) seeing a premium drop in April- September period. Similarly, on the non- life insurance side there was a slower rate of premium growth due to the slowdown in the auto industry. With a large portion of premiums coming from the motor segment, drop in sales led to a lower growth rate in motor insurance premium and hence overall premiums. Gopal Balachandran, CFO, ICICI Lombard General Insurance, said as the headwinds to growth subside with efforts from policy- makers and an overall improvement in the macroeconomic scenario, the industry is expected to pick up pace. The general insurance industry mirrors the prospects of corporate investment and retail growth. Any incremental momentum on these fronts will positively impact the industry growth, he added. On the general insurance, industry players said newer avenues have opened up in areas of liability and directors and officers liability space with changes in the companies Act. Further, both standalone health insurance companies and non- life companies are awaiting details of the Universal Health Care Plan, proposed by the Narendra Modi government. Unviable pricing and heavy discounts to corporates were a matter of concern, especially in the group health and property space. However, Insurance Regulatory and Development Authority (Irda) came out with detailed guidelines on pricing of risk and cautioning insurers against offering unviable and cheap rates below the burning cost. Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance, said they were hopeful and expect a resurrection of the industry given the measures taken by the regulator to correct pricing within the industry. He said this was coupled by the initiatives by the new government at the centre like smart cities, digitalisation, Make in India and financial inclusion among others. With a better economic condition, insurers said higher rate of double digit growth can return to the industry. Non- life sector, which was growing at almost 18 per cent in FY14, slowed down to around 12 per cent in FY15 ( till October 2014). KK Mishra, MD and CEO, TataAIG General Insurance, said the industry is expected to maintain momentum and achieve better double digit growth, say 15 per cent or more, in FY16too. Thisgrowth, hesaidwilldepend on economic and industrial growth within and beyond India. THE DRIVE AHEAD |
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