Kotak Life Insurance expects the life insurance industry to continue to grow at 15% because of poor penetration levels in India. A higher growth rate for the industry could be driven by composition of household financial savings. The industry could also get a boost from increasing income, rising awareness about insurance and an under-penetrated market.
The recent annual report of the Insurance Regulatory and Development Authority of India (Irdai) shows that life insurance penetration stood at 2.74% in 2018, while the overall industry witnessed penetration of just 3.7%. The insurance penetration is measured as the percentage of insurance premium to the gross domestic product (GDP).
Data from Life Insurance Council show that during April-November, the life insurance industry saw new business premium at Rs. 1.69 lakh crore, compared with Rs. 1.23 lakh crore in the previous financial year, a growth of 37.22%. Kotak Life Insurance has seen a higher growth of 43.76% for the period under review.
Kotak Life Insurance in its insurance outlook for 2020 said pension products should be treated at par with the National Pension System (NPS). Investors can get tax benefits of Rs. 1.5 lakh by investing in financial products under Section 80C and an additional benefit of Rs. 50,000 can be availed by investing in the NPS under Section 80CCD.
Irdai chairman recently said more and more insurance companies should come out and list themselves. Speaking on the issue, G Murlidhar, MD and CEO at Kotak Life Insurance, said: “We have been telling regulators to put conditions similar to what publicly-listed companies have to do for disclosures. I think that would be a better solution than forcing companies to go for initial public offering.
Irdai chairman Subhash C Khuntia recently said, “We would like insurance companies to be listed. Earlier, we had come out with a draft that all companies that have completed 10 years should list. But they are finding it difficult to list because some of them have still not crossed critical size even after 10 years. So, we are not forcing them, but nudging them to list…”
Kotak Life also said the regulatory sandbox initiative is a very good move as it allows insurers to evaluate and test innovative solutions.
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Source: Financial Express
