"When the insurance industry was opened up in 2000, the total controlled fund was about Rs 1 lakh crore. It was Rs 8 lakh crore in 2008 and it is Rs 18 lakh crore now. That is how it grew. After five years, it will be about Rs 30 lakh crore,", Hari Narayan told PTI in an interview. He said he is favour of government hiking Foreign Direct
Investment limit to 49 per cent in the insurance sector, leading to at substantial flow of funds into the capital- intensive sector.
It is estimated the insurance sector would require at least Rs 30,000 crore in next five years to double its size. The government is yet to announce the successor to Hari Narayan, whose five-year stint as IRDA chief is coming to an end today.
Former LIC chairman T S Vijayan's name has been proposed for heading IRDA but a formal announcement is still awaited. Under Hari Narayan, IRDA has taken several important steps, including guidelines for listing of life insurance companies on stock exchanges, doing away with third partymotor insurance pool and introducing portability of health insurance.
The Indian insurance industry needs to give "proper" insurance cover for natural disasters and strengthening of reinsurance, the Insurance Regulatory and Development] Authority (IRDA) chief said.
He said the regulator has submitted an approach paper on
insurance cover for natural disasters to National Disaster Management Authority.
"There are several things which could be addressed adequately. One is to give a proper insurance cover for natural disasters and catastrophes. It is recently that I could finish an approach paper which has been shared with the National Disaster Management Authority.
"So that has to be taken forward. That's an important area. Secondly, a deeper strengthening of reinsurance products should take place. That's another one which needs to be done," Hari Narayan said.
Quoting United Nations Environment Programme, 'The India Risk Survey 2012', by Pinkerton C&I India(P) Ltd and Federation of Indian Chambers of Commerce and Industry (FICCI), he said China, India and Bangladesh are ranked first, second and third respectively, in terms of the number of deaths caused due to natural disasters.
In 2011, while China witnessed as many as 22 natural disasters, India witnessed 16, the report said.
According to him, both insurance for natural disaster and reinsurance are interlinked. "Particularly, for natural disaster insurance, there has to be a good reinsurance system] in place," he said.
"Suppose we have situation of a flood, like we had in Mumbai or some other place. Unless we have good reinsurance and systems in place it might be problematic for the Indian] industry. You can't address catastrophe unless you have strong reinsurance. Both go together," he said.