Even as the economy undergoes a slowdown, the insurance sector posted a substantial growth rate in premiums, the data showed. The premiums in general insurance segment may have seen a boost owing to rise in motor third party insurance rate and traffic penalties, The Indian Express reported former IRDAI member KK Srinivasan as saying. "In general insurance, in my view, the spurt is primarily because of two reasons: the increase in motor third party insurance rate and the hefty spot penalties by traffic police as per the new Motor Vehicles Act for failure to possess vehicle insurance," he said. The attractiveness of the retail pension (or savings) products with guaranteed returns as against the bank deposits could have been one of the reasons in the life insurance segment," KK Srinivasan added.
Both life and non-life insurance segments saw robust growth in terms of premiums collected at least till the six-month period ended September 30 of FY20, the data analysed by The Indian Express showed. It comes even as the automobile sector that contributes maximum in terms of premiums to the general insurance sector slowed down substantially. However, extended slowdown may hurt the prospects of the insurance sector in the coming months, the experts also said. "If the economic slowdown continues, insurance will be impacted. Individual APE (annual premium equivalent) has already declined in September for the life segment," The Indian Express reported an unidentified official of an insurance firm as saying.
A rise of 35 per cent at Rs 125,758 crore was recorded in the life insurance premium of all 24 players in the April-September quarter of the FY20, according to the Life Insurance Council. In the first six months of the ongoing fiscal the new premium collected by LIC zoomed 42 per cent to Rs 89,980 crore. For the rest of the private sector players, the cumulative premium till September 2019 rose 21 per cent to Rs 35,778 crore, the data showed.
The general insurance industry in September grew has grown by almost 40 per cent at Rs 19,047 core. The public sector insurers have mopped up a premium of Rs 8,873 crore, up 43 per cent while the private sector companies have mobilised a premium of Rs 10,174 crore, up 37 per cent during September, the data also showed.