Life insurance penetration dropped in 2010-11
The country's life insurance penetration decreased in 2010-11 from a year ago, although non-life insurance penetration rose marginally, Minister of State for Finance Namo Narain Meena said in the Rajya Sabha today.
"The life insurance penetration has decreased from 4.60 in 2009-10 to 4.40 in 2010-11, whereas the non-life insurance premium has increased from 0.60 in 2009-10 to 0.71 in 2010-11," the minister said in a written reply.
The insurance penetration was impacted by several macro-economic factors such as growth, inflation, interest rates, small savings return and returns of competing financial products offered by banks and mutual funds, he added.
However, the total insurance penetration, which is the ratio of insurance premium as a percentage of GDP, has increased from 2.32 in 2000-01 to 5.10 in 2010-11.
In order to improve awareness among people about insurance policies, the Insurance Regulatory and Development Authority (Irda) runs an education campaign under the brand name 'Bima Bemisaal', the minister said.
Replying to another query, Meena said in the first three quarters of 2011-12 (Apr-Dec), 471,068 life insurance agents were terminated due to various reasons.
LIC terminated 195,326 agents during this period while there additions of 204,554. Thereby it ended with 1,315,413 agents at the end of December, 2011 against an opening balance of 1,306,185 agents, he added.
To check mass exodus of agents in LIC, the minister said proper pre recruitment training was imparted to them along with stipulation that renewal commission is payable across the term of the policy.
Also, insurance regulator Irda has formed a committee on health for senior citizens under K S Sastry, former chairman, National Housing Bank, Finance Minister Pranab Mukherjee said in a separate reply.
"This committee was entrusted, inter-alia, with the task of identifying the problems in extending health insurance to the senior citizens without any age limit and at affordable cost," Mukherjee said.