Insurance industry hopeful of sustained growth

[sajiv]

KOCHI: The impact of the economic slowdown has not yet been felt in the insurance sector, according to G.S rinivasan, Chairman-cum-Managing Director of the United India Insurance Company Limited. The insurance industry would continue to do well, he said. Nevertheless, he pointed out that the performance of any sector would be linked to the prosperity of the country, and preferred a booming economy.

Cost cutting by various commercial entities might indirectly affect the growth of the insurance sector too.

Mr. Srinivasan said the company has registered a growth rate of 12.6 per cent till November this year. It was the highest among the four national general insurance companies in the country, he said. According to him, the market share of the company has improved and the trend will continue.

New products will be introduced in the motor vehicle insurance segment as the insurance regulator has given more freedom to create innovative products. Provisions for providing substitute vehicles in the event of an accident and offering medical insurance could be included in such products. He said the government move to raise the FDI from 26 per cent to 49 per cent would not affect the performance of the company. Foreign players were already in the field, he noted.

Insurance cover for property that gets damaged in extremist attacks is already on offer, he said. Innovative products might be launched in this segment too as the demand has increased.

United India Insurance is the second largest non-life insurer in the country in terms of reserves, profits, net worth and solvency margins. As on November 2008, the company has completed a business of Rs. 2,750 crore. The company recorded a premium of 3,740 crore with the highest growth among public sector insurers. The net profit was Rs. 631.62 crore.

Insurance penetration in Kerala is better than in several other States. He said the company is the business leader in the State with 16 divisional offices, 49 branch offices and 22 micro-offices. One million small and marginal farmers in the State have been insured against personal accident under a scheme of the Agriculture Department. The company has insured 1.5 lakh members of the Kerala Dairy Workers Welfare Fund Board. It has been selected for insuring 2.50 lakh active fishermen and 50,000 allied workers under the Fishermen Welfare Fund Board.

The Government of Kerala has selected the company for providing insurance cover to 22 lakh families BPL families and 8 lakh APL families. This is the biggest such project taken up by any non-life insurer in India, according to him.