INSURANCE SECTOR OF INDIA

INSURANCE

The insurance industry in India has changed rapidly in the challenging economic environment throughout the
world. In the
current scenario, Indian insurance companies have become competitive in nature and are providing appropriate
distribution channels to get the maximum benefit and serve customers in manifold ways.

Indian Insurance industry has big opportunity to expand, given the large population and untapped potential.The
insurance
market in India has witnessed dynamic changes including entry of a number of global insurers. Most of the
private
insurance companies are joint ventures with recognized foreign institutions across the globe. Saturation of
markets in
many developed economies has made the Indian market even more attractive for global insurance majors.

The Insurance Regulatory and Development Authority (IRDA) regulate and develop the insurance sector in India
through
calibrated policy initiatives.
OVERVIEW OF THE INSURANCE SECTOR IN INDIA

A growing economy, low insurance penetration in terms of premium percentage to the GDP, as well as
increasing
affordability on account of higher disposable incomes and savings, increasing urbanization and increasing
awareness, are
some of the factors that continue to power the growth of insurance sector in India.

During the year 2009-10, there were forty-four insurance companies operating in India; of which twenty-two
were in the life insurance business and the remaining twenty-one were in general insurance business and one
national re-insurer. Of these forty-four companies, 8 are in the public sector. The remaining thirty-six are private
sector companies.

PERFORMANCE IN THE FISCAL 2008-09

In the fiscal 2008-09, life insurance business registered a growth of 10.15 per cent, general insurance business
recorded a growth of 9.09 per cent in 2008-09. With this, Insurance penetration (premium volume as a ratio of
GDP) for the year 2008-09 stood at 4.74 per cent; 4.17 per cent for life insurance and 0.57 per cent for non-life
insurance.

The Insurance density of India in 2008-09 stood at US$ 47.4, which continued to be dominated by life insurance
business
(US$ 41.2). Also, the general insurance industry has been growing at a little over 16% CAGR over the past three
years.
PERFORMANCE IN THE FIRST QUARTER OF 2009-10
The insurance industry has registered a growth of 11.35 per cent in the first six months of this financial year
(2009-10).
The life insurance sector has grown by around 13 per cent while the non-life segment witnessed a growth of
around 8 per
cent in the first-half of 2009-10. The level of penetration, particularly in life insurance, tends to rise as income
levels
increase. India, with its huge middle class households, has exhibited growth potential for the insurance industry.