Parmod Kumar Arora, member (actuary), Irdai, has expressed disappointment at the number of life insurance companies in the countries remaining stagnant despite several regulatory interventions. The number of life insurance companies in the country had remained at 24, with 23 firms operating for the last 10 years and no new players were coming into the industry, Arora pointed out.
He said while there was growth in the number of policies and all the other parameters but despite this growth, the penetration had not increased and had only gone up from 2.7% in 2001-02 to 4.2% at present and this was not increasing.
The Irdai member said the regulator was performing its development role and in the last year, it had taken a number of steps for ensuring ease of business whether it was regarding cumbersome compliance procedures, a reduction in the number of returns reduced. Further, the FDI limit was increased, the process for registration of companies had been eased, the capital requirement was reduced for niche players, and the country was moving to risk-based solvency and had started the use-and-file process for product approvals, he said.
He called for more disruptive innovations that would use a combination of data analytics, predictive analytics and AI to increase insurance industry penetration. Speaking at the annual CD Deshmukh memorial seminar on ‘transforming the life insurance sector through disruptive innovation’ organised by the National Insurance Academy in Pune, Arora said the total premium written by the insurance industry had gone from Rs 49,000 crore in 2001-02 to Rs 9,12,000 crore last year, assets under management had gone up from Rs 2,00,000 crore to Rs 55 lakh crore while insurance density was up from $11 to $91 at present.
The Irdai chairman’s vision is to ensure adequate life, health, and property for every individual, comprehensive business cover and insurance reaching all geographical areas by 2047, he said. G Srinivasan, director, NIA, said the life insurance industry collected new business premium of Rs 3.15 lakh crore in 2021-22 with a growth of 13% and was poised for growth in the next decade. However, life insurance penetration and density remained low, Srinivasan said. The mortality protection gap was at 83 % which meant there were huge opportunities for the insurance industry to grow, he added.
Saurabh Mishra, joint secretary, DFS, ministry of finance, said there was a need to address the protection gap issue and ensure adequate insurance coverage. LIC has been championing a lot of innovations and it was agile and nimble for its size, he said. Disruptions that have an impact and can be sustained were needed, he said.