Even though the non-life insurance industry has breached the magical figure of 1 per cent penetration in terms of GDP in FY2017, the industry believes there is tremendous potential to double the figure in the next five years, say insurers.
After hovering around 0.7-0.8 per cent for several years, the penetration ratio of non-life insurance industry has moved up to 1.04 per cent in March 2017, based on the revised GDP figure.
This took the industry size to Rs 1.27 trillion, as per data collated by the industry body General Insurance Council, and was driven mainly by around the Rs 21,000 crore premium coming in from Prime Minister Crop Insurance Scheme.
As per the Central Statistical Office, real GDP grew to Rs 121.9 trillion in FY17, a growth of 7.1 per cent over Rs 113.81 trillion in FY16.
When it comes to the general insurance industry, its business grew 33 per cent to Rs 1.27 trillion in FY2017 from Rs 96,000 crore in FY2016, or in terms of penetration at 1.04 per cent from 0.85 per cent in FY2016.
There are 28 non-life insurers which include four state-owned players, two specialised insurers, and six stand- alone health insurers.
Chennai-based United India Insurance, which may also launch an IPO next fiscal, is focusing on strengthening its agency channel to increase its business.
Still, the industry feels that as a market it is still highly underpenetrated market.
"Various government schemes like RSBY, crop insurance scheme, and PMSBY helped the sector cross the 1 per cent-mark penetration mark. Still I do believe there is scope to double this to 2 per cent over the next five years but that will be possible only if the government support continues," United India chairman M Nagaraja Sarma told
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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