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With the opening of the market six years ago, Indian insurance business, which remained under developed with low levels of insurance penetration and insurance density has shown signs of improvement. Opened up of private sector participation with provision for limited foreign equity exposure, has made the industry extremely competitive and aggressive. Foreign majors have entered the country and announced joint ventures in both life and non-life areas. Major foreign players include New York Life, Aviva, Tokio Marine, Allianz, Standard Life, Lombard General, AIG, AMP and Sun Life among others. With competition, the erstwhile state sector companies have become aggressive in terms of product offerings, marketing and distribution.

The foreign and private Indian players have been focused on converting untapped market potential into opportunities by providing tailor-made products. The presence of a host of new players in the sector has resulted in a shift in approach and the launch of innovative products, services and value-added benefits.
The Insurance Regulatory and Development Authority (IRDA) have played a proactive role as a regulator and a facilitator in the sector’s development. The size of the market presents immense opportunities to new players with only 20 per cent of the Country’s insurable population currently insured.
There were four public sector and nine private sector insurance companies operating in general/ non-life insurance business with a premium income of over US$ 2.58 billion in 2003. The insurance penetration i.e. premia as percentage of GDP was 2.32% in 2000. The insurance density i.e. premium per capita was USD 9.90 in 2000.
The life insurance industry underwrote Individual Single Premium of Rs.10,99,898.97 Lacs during 2005-06, of which private insurers garnered Rs.2,24,590.09 Lacs and LIC garnered Rs.8,75,308.88 Lacs. The corresponding figures for the previous year were Rs.590461.13 Lacs for the industry with private insurers underwriting Rs.101578.32 Lacs and LIC Rs.488882.81 Lacs. The Individual Non-Single Premium underwritten during the year ended 31st March 2006 was Rs.19,88,904.29 Lacs, of which the private insurers underwrote Rs.6,94,322.40 Lacs and LIC Rs.12,94,581.89 Lacs. The corresponding figures for the previous year were Rs.1524582.74 Lacs of which the private insurers underwrote Rs.386512.42 Lacs and LIC Rs.1138070.32 Lacs.
Group Premium:
The industry underwrote Group Single Premium of Rs.4,40,624.12 Lacs of which the private insurers underwrote Rs.45,996.35 Lacs and LIC Rs.3,9 4,627.77 Lacs: the lives covered being 1,23,29,399; 8,61,391 and 1,14,68,008 respectively. The corresponding figures for the previous year were Rs.401397.94 with private insurers underwriting Rs.31,125.55 Lacs and LIC Rs.3,70,272.39 Lacs; and the lives covered being 8707628; 5,65,254 and 81,42,374 respectively. The Group Non-Single Premium underwritten during the year ended 31st March 2006 was Rs.60,368.13 Lacs and was underwritten entirely by the private insurers, covering 28,51,686 lives. The corresponding figures for the previous year were Rs.36,523.30.07 Lacs covering 22,45,355 lives.
Segment-wise Segregation:
A further segregation of the premium underwritten during the year indicates that Life, Annuity, Pension and Health contributed Rs.26,38,529.36 Lacs (73.57% ), Rs.1,54,382.34 Lacs (4.30%), Rs.7,92,852.43 Lacs (22.11% ) and Rs.736.56 Lacs ( 0.02%) respectively to the total premium. In respect of LIC, the break up of life, annuity and pension categories was Rs.16,95,656.80 Lacs (66.12%), Rs.1,40,275.38 Lacs (5.47%) and Rs.7,28,586 Lacs (28.41% ) respectively. In case of the private insurers, Rs.9,42,872.56 Lacs (92.26%),
Rs.14,106.96 Lacs (1.38%), Rs.64,266.06 Lacs (6.29%) and Rs.736.56 Lacs (0.07%) respectively was underwritten in the four segments.
Unit Linked and conventional premium:
Analysis of the statistics in terms of linked and non-linked premium indicates that 55.22% of the business was underwritten in the non-linked category, and 44.78% in the linked category, i.e. Rs.19,80,433.27 Lacs and Rs.16,06,067.42 respectively. In case of LIC, the linked and non-linked premium was 29.76% and 70.24% respectively; as against which for the private insurers taken together, this stood at 82.48% and 17.52% respectively.
  (Source: IRDA Journal May 2006)
Therefore there is huge potential to penetrate the insurance markets and reach the untapped population. AGSL can seize this opportunity and increase its revenue through the distribution of Insurance products.
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