PRESENT SCENARIO IN THE INSURANCE SECTOR

The Indian insurance industry is cluttered with 51 companies out which 24 companies
operate in Life insurance and 27 in Non-life insurance business. The development of the
insurance business can be traced by the Insurance penetration and Insurance density ratio.
Insurance penetration is measured as the percentage of insurance premium to the GDP where
as Insurance density is calculated as ratio of premium to the population. Insurance density for
the year 2010 was USD55.7 and the Insurance penetration was 4.40 per cent. Both
penetration and density suffered a fallen 2010 due to macro economic conditions.

LIFE INSURANCE:

In 2011 India was ranked 9th in life insurance business among 156countries for which data
are published by Swiss Re. The growth of estimated life insurance premium was 4.2 per cent
(inflation adjusted) in India which was a decent figure when compared to the global growth
which was 3.2 per cent. In the life insurance business the first year premium collected for the
year 2010-11 was Rs 1,26,381 crores that comes to 15 per cent growth. The growth rate of
new business secured for 2009-10 was 25.84 per cent. The growth rate has fallen by 10.84
per cent. Indian life insurance sector contributed 2.69 per cent to the global market in the year
2010 which was 0.24 per cent more of the previous year.

NON-LIFE INSURANCE:

In non-life insurance business India is ranked in 19th position. In2010 the non-life insurance
business experienced 8.1 per cent growth which is very impressive when compared to the
global growth rate of 2.1 per cent. In 2010 contribution of non-life insurance business to the
global market also increased by 0.58 per cent. In terms of first year premium collected (new
business secured) the non-life insurance business registered a higher growth rate of 22.98 per
cent in 2010-11 to that of 14.06 per cent in 2009-10.The prime reason for the fall in growth is
that the savings of people are being parked in gold and land as they give higher returns than
insurance. More than 55 per cent of the household savings are invested on gold and land. If
the contribution of insurance to GDP is to increase, people should be educated and convinced
about the benefits of insurance