Even as the number of insurers is on the rise in India, life insurance penetration as percentage of gross domestic product has declined. While it was 4.1 per cent in 2007, it came down to 4 per cent in 2008.
Life insurance industry in the country has “de-grown” by 5 per cent this year, largely due to the 38 per cent deceleration in growth witnessed by the public sector behemoth Life Insurance Corporation. Bajaj Allianz and Aviva Life Insurance have also witnessed a slowdown in the current fiscal.
“While on one hand, the GDP growth is expected to clock about 7.5 per cent, the industry has shown a decline in growth by 5 per cent and this has brought down the penetration level of life insurance in the country,” said Rajender Sud, director and head, agency distribution, Max New York Life.
Rishi Srrivastava, senior vice president, ICICI Prudential pointed out that compared to other developed markets, penetration level is still very low in India. “There could have been some deceleration in growth in the last few months but there is a huge potential going ahead, these figures should not worry us.”