NOV 19: With the entry of private players, the total life insurance premium is expected to touch Rs 1,45,000 crore in 10 years while non-life premium would cross Rs 43,000 crore provided the economy grows by over six per cent during the period, according to a Confederation of Indian Industry (CII) report.The life insurance premium, which was Rs 21,581 crore during 1998-99, would be around Rs 59,251 crore in five years and further increase to Rs 1,44,988 crore by 2009-10, it said.The report is based on the assumption that gross domestic product (GDP) grows by six per cent during 2000-05 and seven per cent thereafter, while gross domestic savings (GDS) rises to 27 per cent from the current 22-24 per cent."Life insurance premium's share of GDS, which has been around six per cent, is assumed to increase to around 18 per cent with liberalisation," CII said, adding this compares favourably with international markets like US (24 per cent), UK (41 per cent), Holland (20 per cent), France (30 per cent), Japan and South Korea (about 31 per cent each).However, growth of premium income in life segment would be affected by tax advantages, likely returns and flexibility of products, the report prepared by a expert group said.Growth in pension schemes is expected to be more than the life insurance premium and be around Rs. 3,900 crore in 2004-05 and further grow to Rs 14,000 crore in 2009-10, from Rs 1,156 crore during 1998-99, CII said.The life insurance premium in India, constituting only 2-3 per cent of GDP, has a world market share of only 0.48 per cent as on 1998. Currently, about 40 million people of the totalpulation of one billion in the country are covered by life insurance."The enormous market scope that exists in this sector hasbeen held back not because of per capita income but due to lack of competition," the CII report said.Non-life premium by companies, which was Rs. 8,378 croreduring 1998-99, would increase to Rs. 18,714 crore in the next five years and cross Rs. 38,600 crore by 2009-10, it said.In case of personal non-life premium, the figure isexpected to be around Rs. 1,674 crore five years hence and Rs. 5,069 crore by 2009-10, as compared to Rs. 476 crore during 1998-99, the report said.The growth in non-life premiums are on the assumptionsthat the country's gross domestic capital formation (GDCF) would be increasing significantly due to greater investments in the infrastructure sector."The non-life premium as a percentage of GDCF has beenassumed to increase to around four per cent due to increased contribution of the personal lines of business," CII said.India's non-life premium is a mere 0.25 per cent of theglobal market share as on 1998, while the life and non-life taken together constitute only 0.39 per cent of the international insurance market.
