(50

INTERNATIONAL INSURANCE SCENE

The New Economic order of 1991 has brought several changes in insurance industry. The business of
insurance has increased rapidly thereafter. Premium, profitability, financial strength, prospects
Catastrophe losses, solvency ratio, risk management and so on are the factors of analysis of intermational
insurance scene. They are analysed under life insurance, non-life insurance and total insurance.
Insurance density and insurance penetration are calculated with premium percapita and premium
as
percentage to Cross Domestic Product. Inflation rate is also counted for deciding the real work of
insurance gromh.
Life Insurance
The international life insurance scene has been
analysed under premium, profitability, Solvency Ratio,
Risk Management and
prospects.
Premium
The life insurance premium in world market has increased rapidly upto 1986 but declined thereafter.
Table 50.1 Word premium Real Growth Rates (Approximately in percentage)
Year
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
%Increase 2.5 3.5 5.1 4.0 12.0 13.5 21.0 12.5 12.7 5.0
()
or Decrease ()

Year 1990 1991 1992 1993 1994 1995

% Increas 1966 1977 1998 1999
2.0 2.5 5.5 6.0 4.0
or Decreas5e 4.8 2.5 7.5 4.8 7.5
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008
% Increae 9.0 -1.5 2.5 -0.7 2.9 5.2 2009 2010
or Decrease
7.7 13.0 -5.8 -2.0 6.4
Source: Signa: February 2005, April and May 2006 issues. 4/2007
World Life Insurance premium increased 3.9
to US by per cent in real terms after inflation
S/1974 on after 2.9 per cent growth in 2004. The world premium of adjustment
been OSD 1973703 million in
2005. Indía has life premium life insurance business has
1.02 per cent. India's rank has only USD 20175 million in 2005 i.e.,
shown gowth rate of 14.1 improved from 18th to 17th in 2005. The developing countries
per cent in 2008 while developed
The growth rate of life nations has shown decline by-7.8 per havecent.
15.3 per cent in 2005 whereas
insurance premium in India has been 17.3 per cent in 2004 and
world's growth rate has been 9.9
t reveals that India's per cent and 5.7 per cent
growth more respectively.
adjustment of inflation has been 10.5satisfactory
than the world The real growth rate after
average.
growth rate of life insurance premiumperhas beenwhich
cent is more than all the
highly ranked countries. The
constant in the worldmarket.
profited from the booming stock markets which favoured the sale of European life business
yield curve due to higher short-term interest rates made unit-linked policies. The flattering
fixed annuities unattractive and the low-
performing stock markets did not support variable annuities. In
US
Emerging markets, life insurance
708
Share in world Market
Share of Total Business
Inflations Adjusted Change in %
Cin %) Premium Volume in
(in %) Change in % Nominal USD million of USD

E,

:.
Share of Worid Market
Sharo of total Business in Inlations Adjusted Chango in % Premium Volume in
in% %(Life + Non-Lifo) Changein% Nominal USD million of USD

EREESEE22tkEEE.eteEEt.iN
 NTERNATIONAL INSURANCE SCENE 711

which needs savings as

nainly driven by the fastgrowing incomes ofa relatively. Young population
ismain
protection. The life insurance premium of unit-linked and pension products.
old a
Per Capita Premium
íe., USD 3287.1
Life insurance per capita premiumofin USD has been maximum in United Kingdom in 2004 and
in 2005 followed by USD
in2005 3078.1 Switzerland. United States have been at twelfth rank
USD 1753.2 in 2005,
also in 2005 having
Table 50.3
Life Insurance Index by Region
North Latin Oceana World
Europe Asia Africa
America Caribbean
2004 1617.2 37.2 848.1 147.2 30.2 851.0 291.5
2005 1686.3 42.0 911.8 149.6 30.7 885.0 299.5
2006 1731.8 51.3 1119.6 154.6 38.3 896.3 330.6
2007 1869.3 63.1 1222.6 156.7 39.6 1671.4 358.1
2008 1855.6 63.5 1244.1 173.9 38.4 1281.5 369.7
2009 1572.8 75.6 1111.0 180.3 32.3 930.7 341.2
2010 1620.9 93.5 1110.6 208.1 45.8 1109.7 364.3
2004 4.12 1.01 4.68 5.58 3.41 3.75 4.55
2005 4.05 0.93 4.69 5.16 3.33 3.16 4.34
2006 3.9 1.00 5.3 5.00 3.40 3.40 4.50
2007 4.1 1.00 5.0 4.60 3.10 3.40 4.40
2008 3.97 0.99 4.54 4.42 2.47 3.96 4.13
2009 3.4 1.1 4.5 4.5 2.2 3.1 4.0
2010 3.4 1.1 4.5 4.5 2.7 2.8 4.0

Table 50.3A
Life Insurance Index by Selected Countries

Switzer United Japan Ireland| Finland Denmark Belgium France Hongkong|Sweden ndia
land King
dom
2004 3275.1 3190.4 3044.0 2617.4 2461.0 2310.5 2291.2 2150.2 1884.3 1764.3 1.7
2005 3078.1 3287.1 2956.3 2759.7 2707.8 2489.9 2988.7 2472.6 2213.2 |21052| 183
2006 3148.0 5139.6 2829.3 4203.8 2903.1 2840.8 2427.7|2922.s 2456.02214.6 33.2
3159.1 5730.5 2583.9 5715.1 3093.1 3381.0 2972.6 2928.3 3031.9 2438.5 400
2007
2008 3551.5 5582.1 2869.5| 3599.4 3488393669.0| 3021.5 2791.9 2929.6 28412|41.26.
2009 3405.6 3527.6 3138.7 3437.1 3379.4 3816.0 2323.3 2979.8 2881.6 2690.5 47.7
2010 3666.8 3436.3 34728 3213.7 3323.9 3429.2 2625.7 2937.5 3197.33414.2 55.7
6.73 6.38
20046.736.73 8.92 8.26 6.89
7.88 4.22 2.53
2005 8.90 8.32 7.33 8.36 7.08 8.63 4.14 2.53
2006 6.2 13.108.30 7.2 6.5 7.90 9.20 4.00 4.10
5.7 12.6 7.50 9.3 6.7 5.9 7.3 10.60
2007
5.8 6.8 5.9
2.1 4.20 4.00
2008 5.5 12.8 13.3 6.4 6.2 9.9 5.4| 4.10
6.8 7.5 6.8
2009 5.4 10.0 7.8 5.3
7.2 9.6 6.2 4.60
2010 5.5 9.5 8.0 6.9 6.1 6.1 1.4 10.1 6.5| 44
 INSURANCE-PAINCIPLES AND PRACTICE
712
The per capita life premium has been more than 10 ranks in United Kingdom, Switzerland
and Sweden. It reveals that almo
Belgium, Japan, Ireland, Finland, Denmark, France, Hong Kong
all the developed nations have maximum life insurance cover. India stood at 78 rank having li
insurance per capita merely 18.3 USD in 2005. She has enough scope of insurance development

Percentage of Life premium to GDP

The percentage of premium to gross Domestic product ofthecountry was maximum of 11.17 per cent
in Taiwan in 2005 followed by 10.84 per cent in South Africa. The developed nation except United
States have more than 5 per cent of their GDP in the form of life insurance premium viz
8.90 per cent in United States, 8.63 per cent in Hong Kong, 8.36 per cent in Belgium, 8.32 per cent in
Japan, 7.33 per cent in Finland, 7.27 per cent in South Korea and 7.08 per cent in France.

Table 50.4
Life Insurance Premium (As percentage to world life Premium)
(Share of World Market)

Rank Rank in
in 2004 2004 2005 2006 2007 2008 2009 2010 2010
United States 26.77 26.20 24.15 25.17 23.22 21.12 20.9
Japan 20.93 19.05 16.42 13.82 14.74 17.12 17.50
U.K 10.26 10.11 14.11 14.61 13.76 9.34 8.49
France IV 6.97 7.81 8.05 7.81 7.27 8.32 1.64 V
Germany v 4.57 4.57 4.30 4.28 4.47 4.79 4.56 VII
Italy VI 4.44 4.65 4.05 3.69 3.32 4.94 4.84 VI
South Korea VII 2.63 2.98 3.27 3.40 2.67 2.46 2.82 VII
India XVIII 0.92 1.02 1.68 1.97 1.96 2.45 2.69 IX

Percentage of Premiums to GDP (%)

nsurance Penetration)
United States 4.12 4.14 4.00 4.2 4.1 3.5 3.5 XVIII
Japan IV 8.26 8.32 8.3 7.50 1.6 2.1 8.5 VI
U.K IlI 8.92 8.90 13.1 12.6 12.8 3.0 9.9
France IX 6.38 7.08 7.9 1.3 6.2 3.1 14 VIl

South Korea VI (6TH)6.75 7.27 7.9 8.2 8.0 3.9 7.0 VI

India 44th 2.53 2.53 4.1 4.0 4.0 1.7 4.4 30th
(4TH RANK)

South Africa 1143 10.64 13.0 12.5 2.5 2.9 12.0

Taivan 11.06 11.17 11.6 12.9 13.3 3.0 15.4
Switzerland VII 6.73 6.50 6.2 5.7 DX
5.5 4.5 5.5
Singapore X 6.02 6.00 54 6.2 6.3 1.7 4.6 22th
NTEANATIONAL INSURANCE SCENE 7
States and
The percentage of life premium to GDP was merely 4.14 per cent in United
insurance
India in 2005. It reveals that India has abundant scope oflife insurance. The
2.53 per cent in
conpanies should come forward to expand their business in India.
Profitability
been higher demand
The outlook for 2006 has been favourable for life insurance over 2005. There has
The outloo

which
in a situation in the
share of retirees in the population increases and the
tact
for old proviSions
shift away frmm public old age provisions to private schemes. Changing
that government actively
In Germany, premium drops in
taxation of life products plays an important role both for high growth. for India that the
business due to removal of tax advantages on life products. It is a good lesson
life Taxes on the life insurance.
ife insurarce will decline, if Government removes ofIncome
the facilities
as costs have been cut,
Profitability of life business has continued to improve in many countries interest
have been adjusted to reflect low
guaranteed interest rates have been reduced and bonuses base will increased with
Risks products a pension business are predicted to grow. The capital
rates.' insurance business Unit
retained earning in insurance companies. Many banks have started life
rising been helpful for
inked business of life insurance has also increased. The economic growth bas
enhancing global insurance.

Solvency
The objective of solvency
Solvency is a challenge for life insurers as it involves different types ofrisk. The solvency is
and reflect the risks to which an insurer is exposed.
is to protect policyholers interest
of risk management and transparency.
decided on the bases of rules of financial resources, process investment risks.
market consistent valuation of assets and liabilities is the basis for provision for
The focusses on risk and capital
should inforce insurers focus on risk/return fundamentals. It
Solvency
has taken lead in solvency requirements.
management. European insurance industry
European Union (EU) Solveney necessitated to
Directive of 1973 and 1979 which
in Europe was required by the Council
Solvency business. In 1994, laws were enacted
establish capitál buffer to cope with the uncertainty ofinsurance
in the early stage to better protect the policyholders.
to detect the insolvency case
Solvency I
minimum guarantee fund
I Directives were in Feb. 2002. It ensured higher
passed
The Solvency
and composition of available capital. Solvency requirements
increased threshold in solvency margin authorities. The
was given to insurance supervisory
should be fulfilled at all times and more power
life insurance solveney margin is calculated as:
mathematical provisions
mathematical provision retention rate
x

Solvency 4%
= x
gross
+3% x capital at risk x retention rate capital at risk.
net provisions+ gross provisions
=

Retention Rate Mathematical provisions

at risk
net capital at risk+ gross capital
Rate capital at risk
=

Retention
fund was set up one third ofthe required solveney margin.
The minimum guarantee
invested by imposng restrictions on the asset classes. The available
The technical reserves will be
as the assets
of the insurer free of any foreseeable liabilities less anv
capita! funds are calculated
intangible items.
Criticisms
is not based on market consistent approach. Solvency requirements
The valuation of assets and liabilities
and capital at risk in lite insurance Investment risk is not incl.ded
depend on mathematical reserves
n the required solveney margins.
 INSURANCE-PRINCIPLES AND PRACTICs
714
Solvency II
are being
the EU Commission. Its Draft prepared is
The need for Solvency II was realised in 2001 by
the council of Ministers in 2007. The objectives are to
expected to be passed by EU parliament and developments and to
market
requirements, to reflect
protect policyholder, establish a solvency capital ofharmonisation of quantitative and qualitative
avoid unnecessary over capitalisation. There is need
developments with the aim of promoting further
supervisory methods, incorporation of international the International Association
Association of Insurcance Supervisors,
convergence with International
Standards Board. Solvency II includes quantitative
of Actuaries and the International Accounting
market discipline Quantitative requirements includes basice
requirenents, qualitative requirements and
minimum capital requirements, solvency capital requirements
for the calculation oftechnical provisions,
consist of principles of internal control and
and investment rules. Quantitative requirements
Market discipline reveals disclosure and
risk management and supervisory review process.
transparency.
Quantitative Requirements
methods for calculating technical provisions and to achieve
Solvency II aims to harmonise
the International Financial Reporting standards (IFRS). Valuation
congfuency with developments in
value of cash flows together with risk margin.
of insurance liabilities is based on the expected present
Solvency II envisages the Minimum Capital Requirement
(MCR) and Solvency Capital Requirement
(SCR).
The Minimum capital Requirement is the level of capital below which an insurance company
The Solvency capital requirement delivers a level of
present an unacceptable risk of policyholders. unforeseen losses and gives
capital that enables an insurance company to absorb significant
reasonable assurance to policyholders. All risks relating to underwriting, investment, credit, operation
and liquidity are factored into its calculation. A risk measure is an amount of capital to a distribution
of economic profit are loss. Appropriate risk and confidence level are also decided internally by the
insurers.

Qualitative Requirements
Qualitative requirements envisage on rights and duties of the supervisory authorities and principles of
transparency and accountability. Internal risk model uses the stress tests, governance process and
quality of risk mitigation. Risk diversification is a key components of risk management. The risk
diversification includes diversification with risk types, accross risk types, accross entities within teritory
and accross entities beyond territory. Capital mobility and risk transfer shall be recognised if financial
resources are available to back policyholders and other creditors claim with sufficient value.

Market Discipline
The third factor for solvency II refers to disclosure and transparency to reinforce market mechanisms
and riskbased supervision. The information of insurer's risk should have a discipline effect on

policyholders, investors, rating agencies and any other interested parties. Certain supervisory
information should be made public as it will be useful for the potential policyholders to select a sound
insurer.
The US insurance supervisory authorities introduced the Risk Based Capital (RBC) system in
1994. It is to hold capital equal to atleast their RBC requirement. It slems stock, bond and real estate
holdings, credit risk, underwriting risks i.e., loss reserves and paid claims risks and risk from aftiliates.
The biggest risk in life insurance is the other asset risk i.e., stemming from investments in stock,
bonds, mortgages and real estate.

Prospects
Life premium are expected to grow in future. Emerging markets are likely to benefit from their booming
 71
ERNATIONAL INSURANCE SCENE

nomies. Many governments have favoured private old age provision. So yough prospects for lite
the
benefits,
ance look very promising. When some governments have cut social security
insurance is
indivic
iduals look for alternate protection-methods. The growth outlook for private risk
veryp o s i t i v e .

NON-LIFE INSURANCE
The non-life premium has slowed down after touching the highest growth rate of 13.50 per cent in
The
continuously declining and increased slightly to 9.5 per cent in 2002. It came down to
1986.It has
06 per cent in 2005 although it was 2.4 per cent in 2004. The real non-life premium in us declined by
3 per cent and western Europe increased by 0.61per cent. The non-life premium in emerging markets
focreased by 6.0 per cent although it was less than 9.5 per cent of 2004.

Table 50.5 Growth of Non-Life Insurance Premium (in )

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
% Increase+)
or Decrease ( 4.0 0.0 1.0 4.0 4.5 9.5 13.5 4.85.2 2.0
Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
%Increase
or Decrease () 2 4.5 3.5 4.0 2.5 1.5 1.0 1.0 0.0 2.5
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
%Increase
or Decrease (9 5.0 5.5 9.5 7.0 2.4 0.6 5.0 10.0 -0.5 -0.14.4
Source: Sigma No. 2/2005 and 5/2006
Growth Rate of Non-Life Premium
The growth rate of non-life
premium in real term has been very high i.e., 10.1
and 11.5 per cent in 2005 in India.
The real growth per cent in 2004
of
Germany, Canada and Australia in 2005. It reveals thatnon-life premium been negative in USA,
has
the level of higher rank are the countries which have
facing low growth rate. Countries which are already reached to
geting higher growth rate. having less business are
Japan has faced negative
world market has been 43.10 growth
rate (nominal base) in
2005. The share
ie., the highest of all the countries. The of non-life
premium in
high. United States of America have been life premium was also
share in 2005. It has been very particular about insurance very
per cent. 6.93
observed that all countries above 10 ranks have Germany has 7.37 per cent
per cent in United growth
Kingdom, 6.92 per cent in Japan, 4.69 per cent in rate more than two
cent in Italy, 3.05 per cent in canada, 2.39 France, 3.27
De world-share
in non-life per cent Spain and 2.01 per cent in Netherland
in per
premium. have been
The share of non-life
States, Germany, Canada andpremium to total business have been more than
50 per cent in
life insurance business. Spain. Japan the lowest share in total
has United
business. It reveal that
more
 Share of World Market Share of total Business in Infations Adjusted Change in % Premium Volume in
in % %(Life +Non-Life) Change in % Nominal USD million of USD

EEEEEEESEttsesee bevecsll
EEEEEEEEEEEEEE:eeeueEeEzzedglti
NTERNATIONAL INSURANCE SCENE
INTEANAT
717

Table 50.5 B
Non Life Insurance Index by Region
North Latin
World
America America Asia Africa Oceama
Europe
Caribbean
885.9 220.0
2004 1984.0 53.7 579.8 47.1 13.1
219.0
2005 2048.8 63.8 601.9 48.3 18.5 904.3
891.0 224.2
2006 2072.2 75.4 626.0 50.4 15.3
988.1 249.6
2007 2115.5 91.0 739.8 54% 15.8
17.1 990.5 264.2
2008 2133.2 107.3 799.8 60.4
932.2 253.9
2009 2061.7 116.6 750.6 62.8 16.6

2103.5 739.6 73.5 189 1173.4 263.0

2010 125.6 3.43
5.05 1.46 3.20 1.79 1.48 3.90
2004
1.67 1.47 3.22 3.18
2005 4.92 1.42 3.10
1.40 3.30 3.0
2006 4.70 1.40 3.00 1.60
1.60 1.20 3.20 3.1
2007 4.60 1.50 3.00
2.92 1.53 1.10 3.06 2.95
2008 4.57 1.55
1.6 1.1 3.1 3.0
2009 4.5 1.7 3.1
16 1.1 3.0 2.9
2010 4.5 1.5 3.0

Table 50.5C
Non Life Insurance by Selecte Region
AustraliaIndia
Switzerland United Nether- Lucem-Ireland United Denmark Germany| Canada|
States land berg kingdom
1204.4| 4.0
G2004 2441.2 2062.6 1663.1|1555.8|1473.8 1318.0 1309.9 1262.3 1262.6
2122.9 1785.5 1643.8|1417.4| 1311.9 1386.3 1268.4 1377.1 1247.7| 5.2
4.4
2480.3
E2005
2006
2006 2450.1 2134.2 1152.91817.4 1360.9 1327.1 1430.6 1306.7 1504.3 1292.1
2164.6 4070.5 2000.0|14564 1383.2 1722.1 1427.9 1667.0
1430.9 6.2
2581.7
2007
2007

2177.4|4483.5 2191.7|1315.01275.7| 1750.0 1572.7 1728.0o1307.9

1568.5 6.2
2008
2008 2827.9

2009
2009 2852.1 21073 4508 5 1997.6|1078.6 1051.2 17129 1518.7 1643.7
21272| 4333.3 1954.910829|1060.2 1655.1 1501.6 18869 1603.0
87
2010
2010 2966.9

2004 5.02 5.14 4.67 3.68 3.86 4.05 -0.65

2005 4.99 5.01 4.67 3.55 3.73 3.92 0.61
4.8 2.50 3.40 3.60 4.70 0.60
2006 4.90
8.70 1.9 2.4 3.00 3.0 3.60 3.80 3.2 0.60
2007 4.60
2008 4.40 4.6 8.5 .8 2.1 2.9 3.50 3.8 2.40 0.60
4.5 9.3 2.0 2.1 3.0 3.1 3.70 4.1 3.0 0.60
2009 4.5
2.4 2.9
2010 4.4 4.5 9.2 2.9 1.9 5.0 29
718 INSURANCE-PRINCIPLES AND PRACTICE

Table 50.6 A (Total Insurance)

Total Premium Growth Rate by Selected Countries

United Japxn United Framce iermamy ltaly South Canada Netherland Spain India
Stater korea
kingedom
2003 1057162 472820 254363 161483 170137 112410 60138 59735 52037 47282 18132
2004 10929 494735 292199 199863 190811 128405 68806 69935 59919 s6002 21608
2005 1142012 476481 300241 222220 197251 139194 82933 78723 61073 60275 25024
s2006 117o1011 4460261 418366 21164 201544 138079 101179 88200 62669 65813 43.32
2007 1229648 424832 463686 268900 222825 142328 16990 100398 10283 14696 54375
20082008 1240643 473197 450152 273007 243085 140689 97023 105174 112611 87038 56190
2009 1139746 s05956 312165 283070 238366 169360 91963 98840 108144 82715 65085
2010 1166142 s57439 310022 280082 239817 174347 114422 115521 97057 16082 78373
2004 3.8 4.1 15.9 0.5 12.1 14.6 14.1 16.8 12.6 18.2 172
2005 3.0 3.7 2.8 11.2 3.4 8.4 20.5 1.9 1.6 158
2006 S43 -3.75 24.46 13,65 3.32 -1.89 18.90 12.99 5.19 8.92 56.99
2007 4.69 -3.31 28.16 10.09 7.47 1.27 16.28 14.74 11.98 13.50 34.8
2008 0.22 20.37 -16.56 0,06 8.75 -1.20 -15.97 4.38 9.74
16.22-2.76
2009 8.07 4.73 -21.84 2.61 -I.48 20.38 1.485.29 -5.57 4.63 17.21
2010 1.42 6.76 0.69 -1.39 -0.05 2.94 16.25 16.11 -6.14
-7.36 21.95
2004 . -0.9 21 7,6 0.6 2.3 3.1 6.5 4.6 104
2005 0.3 6.7 3 9.3 14 6.5 8.5 -0.2 0.3
.2 94
2006 2.17 -1.49 20.9 10.61 0.55 4.90 8.73 3.72 2.92 4.11 52.56
20072007 1.78 3.17 15.31 2.90 1.33 -8.82 11,06 6.35 1.05 1.25 13.00
2008 -3.44 6.75 -12.99 -9.33 -1.26 -10.93-15.97 4.38 -0.24 4.04 0.13
2009 -7.77 -1.06 -9.43 8.20 3.64 26.07 0.81 1.02 -1.51 0.95 9.02
2010 -0,22 -0.09 -2.66 07 3.86 2.94 2.59488 491
Non-Life Insurance Index
Per Capita Premium
Thepercapita non-lifepremium in USD was maximum in switzerland ie., USD 2441.2 in 2004 and
USD 2480.3 in 2005 followed by United States, Netherland, Luxumburg and Ireland. Their ranks
have not changed. The other countries under ten ranks have been United
Kingdom, Denmark, Germany,
Canada and Austria. All the developed nations have maximum non-life per capita insurance. India is
at 78th rank having per capita non-life premium USD 4.0 in 2004 and USD 4.4 in 2005. The non-life
premium per capita is USD 1204.4 in 2004 and USD 1247.7 in 2005. India has to develop the non
life insurance,
Percentage of premium to Gross Domestic Premlum
North America has 5.05 per cent premium to GDP in 2004 and 4.92 per cent of GDP in 2005. The
lowest percentage was in Latin America i.e., 1.46 per cent and 1.42 per cent in the
United States has maximum share of non-life insurance to GDP ie., 5.14 per cent in 2004years.
and
respective
5.01 per cent in 2005. Switzerland stood second, Netherland was third and Newzealand was fourth n
this comparison in all the two years. Other countries within 10 ranks are Canada, Slovenia, Gemany,
Australia, United Kingdom and France. India stood at 44th rank in 2004 and 43th rank in 2005.
 ANATIONAL INSURANCE SCENE
NTERNAT
Table 50.6
Total Premium Growth Rate by Region
Latin
America
North &
World
Carbean Europe Asia Africa Ocean
America 46103 2958359
42089 1035838 684970 32461
2003
1116897
54088 3264158
1179226 493 13 1206191 738918 36422
2004

58599 1287920 754779 40025 57756 3425714

2005 221635 3723412
49667 58316
1258301 71428 1484881 800819
2006
53294 68818 4060870
1330066 87397 1680693 84060
2007 77716 4269737
104933 1753200 933358 54713
2008 1345816
67241 4066095
110910 1610620 989451 49287
2009 1238586
66719
81160 4338964
1281664 127867 1620437 1161118
2010
19.7 9.7
15.7 7.5 15.9
4.5 17.2
2004 4.9
2.8 9.9 6.8
18.8 6.8
2005 3.6 8.0
4.65 16.27 3.78
21.50 11.22
2006 5.93 10.50
8.09 6.86 18.17
22.18 15.47
2007 5.39
12.82 3.44
17.06 0.66 14.94 1.92
2008 0.54 -3.65
6.70 -14.39
4.33 -5.46 5.87
2009 -7.85
23.31 5.58
18.06 0.37 14.46 16.13
2010 2.59
-1.3 3.2 2.3
10.5 3.2 2.1
2004 1.4
3.5 7.1 0.1 2.5
1.9 4.4
2005 -02
2.17 4.97
2.24 11.61 7.47 83 17.55
2006
4.52 2.80 3.89 3.22
9.61 3.43
2007 2.10
6.60 4.88 8.63 -1.96
-3.09 8.41 -6.20
2008
1.83 2.78 -11.13 -9.57 -1.07
-7.08 .79
2009
1.81 7.16 -1.11 2.32 2.73
2010 0.03 8.19

TOTAL INSURANCE

The growth rate of total insurance premium had

he total insurance has increased considerably. rate has declined to
to 17.0 per cent in 1986. The growth
.0 per cent in 1980 which increased cent in 2000. It remained constant at 2.5 per cent in 2005.
0 per cent in 1990 and became 7.0 per

Growth Rate
i. e., 20.5 per cent in 2004 in France and 20.5 per cent
hetotalpremium growth rate has been highest rate has been 3.8 per cent in 2004 in United States and
2005 in South Korea. The lowest growth total premium volume in USD has been second highest in
.7 per cent in 2005 in Japan although the
apan. The total premium volume has been the highest in United States and the growth in 2005 was
modest there. UnitedKingdom having third rank in total premium volume has been satisfactory in
720 INSURANCE-PRINCIPLES AND PRACTICE
growth rate ie, 15.9 per cent in 2004 and 2.8 per cent in 2005. France has significantly high growh
rate in premium volume and also has fourth rank in total premium volume. Germany and taly have
also maintained their ranks in total premium volume. After interchanging the growth rates with South
Korea and Canada. Netherlands and Spain have maintained their ranks. India is l19th in total premium
volume. It is good sign for India. The growth rate is moderately high i.e., more than
15 per cent although its share in world's total insurance premium is merely 0.66 per cent in2004 and
0.73 per cent in 2005. Inflation-adjusted growth rate is the highest in India ie., 10.4 per cent in
2004 and 9.4 per cent in 2005. United States have maximum share of world market ie.,
33.84 per cent in 2004 and 33.36 per cent in 2005.
Table 50.6. C
Total Insurance Index
By Region
North Latin
America America
Caribbean Asia Africa Oceania
Europe World
2006 3601.1 90.9 1427.9 194.3 43.4 1736.9 511.5
2005 3735.1 105.7 1513.8 197.9 44.21789.3 518.5
2006 3804.0 126.7 1745.7 205.0 53.6 17873 554.8
2007 3984.8 154.1 1962.4 210.7 55.3 2059.5 607.7
2008 3988.8 175.8 2043.9 234.3 55.6 2271.9 633.9
200 3634.5 192.2 1 861.5 243.1 48.8 1862.9 595.1
2010 3724.4 219.1 1850.2 281.5 64.7 2283.1 6273
2004 9.17 2.47 7.89 7.37 4.89 7.65 7.99
2005 8.97 2.35 7.78 6.83 4.80 6.38 7.52
2006 8.7 2.40 8.30 6.60 4.80 6.70 7.50
2007 8.7 2.50 8.00 6.20 4.30 6.60 7.50
2008 8.5 2.50 7.5 6.00 3.6 7.0 7.10
2009 7.9 2.8 7.6 6.1 3.3 6.2 7.0
2010 79 75 6 3.9 58 69
Total Insurance Indeex
The premium of total insurance has been analysed on the basis of per capita in USD and percentage
share of Gross Domestic products (GDP).
Table 50.7 A
Total Insurance Index
(% of Premium to GD.P)
South Taiwan U.K.
Switzerland| Japan Netherland Belgium South France U.SA Hong Inda
Africa Kong
Korea
2004 14.36 14.13 12.60
2005 13.87 14.11
1.75 10.51 10.10 9.62 9.52 9.52 9.36 9.27 3.17
122.45
11.19 10.54 9.79 1.15 10.25 10.21 9.15 9.93 3,14
2006 16.0 14.5 5.50
11.0 10.50 10.4 9.2 11.10 11.0 8.8 10.50
2007 15.3 15.7 15.70 10.3 9.6 13.40 9.6 11.18 10.3 8.9 11.80
2008 15.3 16.2 15.7 9.9 9.8 12.9 9.1 11.80 92 8.7 1.20
2009 12.9 16.8 12.9 9.8 9.9 13.6 8.0 104 10.3 8011.0
2010 14.8 18.4 12.4 9.9 10.1 12.4 8.8 11.2 L10.5 8.0114 S
NTERNATIONAL INSURANCE SCENE 721

Table 50.7
Total Insurance Inder by Selected Countries
(Per capita Premium in USD)
Switzeriad Unined Ireland Belgium Dnmark United Japan Netherland Framce| Finland India
Kingdom States
2004 $716.4 4508.4 4091.2 3275.6 3620.4 3755.1 3874.8 3599.6 3207.9 3134.41 19.7
2005 sSS84 4599.0 4177.0 3985.6 3739.7 3568.5 3389.3 22.7
S561.9 6466.7
3876.2 3875.2 3746.7
2006 5564.7 3681.2 4271.4 3923.7 3589.6 4015.4 42714 3828.8 38.4
2007 $740.7 7113.7 771.4 4131.5 5103.1 4086.5 3319.9 6262.9 5103.1 3905.8 46.6
2008 6379.4
6257.6
6857.8
4578.8
4914.5 4298.8 5418.9 4078.0 3698.6 43932
6849.5 4298.8 4393.2
6554.6 4269.0 4253.0
47.4
54.3
009 4515.7 3494.0 5528.9 3710.0 3979.0
010 6633.74496.6 4296.6 3736.0 s084.2 37589 4390258453 4136.6 41815 64.4
Per Capita Premium
The per capita premium has been the highest in Switzerland i.e., USD 5716.4 in 2004 and
USD 5558.4in 2005 followed by United Kingiom having per capita premium of USD 4508.4 in 2004
and USD 4599.0 in 2005 and Ireland USD 4091.2 in 2004 and USD 4177.0 in 2005. Belgium,
Denmark, United States, Japan, Netherlands, France and Finland have been within 10 ranks. India
has 78th rank so far per capita premium is concerned although it has 19th rank in total premium
voume.
Table 50
Share of World Market in % by
Region and slected countre
North Latin Europe Asia Africa Oceania World
America America
& caribbean

2004 35.99 1.52 36.94 22.69 1.16 1.70 100.0

2005 35.66 1.71 37.60 22.18 1.17 1.69 100.0
2006 33.79 1.92 39.88 21.51 1.33 1.57 100.0
2007 32.75 2.15 41.39 20.70 1.30 1.69 100.0
2008 31.52 2.46 41.06 21.86 1.28 1.82 100.0
2009 30.46 2.73 39.61 24.33 1.21 1.65 100.0
2010 29.54 2.95 37.35 26.76 1.54 1.87 100.0
Selected Countries

United Japan United France Germany taly South Canada| Netherland Spain India
SNates kingdom korea

2004 33.84 15.18 9.09 6.00 5.88 3.97

2.12 2.15 1.81 1.72| 0.66
2005 33.36 6.49 5.76 4.06 2.42 2.30
13.91 .76 1.78 1.76| 0.73
2006 31.43 12.36 11.24 6.75 5.49 3.722.72 2.73
1.69 1.77 1.16
2007 30.2810.41 11.42 6.62 5.49 3.50 2.88 2.47 2.53 1.84 1.34
2008 29.06 10.54 6.39 5.69 3.30 2.27 2.46
11.08 2.64 2.04 1.32
2009 28.03 12.44 7.61 6.96 5.86 4.17 2.26 2.43 2.66 2.04| 1.60
2010 26.88 12.86 7.15 6.46 5.53 4.02
264 2.66
2.24 1.75 1.81
 INSURANCE-PRINCIPLES AND PRACTICE
722
%of Premium to GDP
Africa i.e., 14.38 per cent of GDP in
The highest percentage of premium to GDP has been South
and Switzerland. Japan stood
2004 and 13.87 per cent in 2005 followed by Taiwan, United Kingdom
South Korea and France
at 5th and 6th position in 2004 and 2005 respectively. Netherlands, Belgium,
have been with 10 ranks. India has 44th rank covering 3.17 per cent of GDP in 2004 and 43th rank
having 3.14 per cent of GDP.
Total Insurance Index
The premium of total insurance has been analysed on the basis ofper capita in USD and percentage
share of Gross Domestic Product (GDP).
T N UNT . TO