Why is the growth in general insurance not keeping pace with the growth in the economy?
In India, motor insurance coverage is the biggest segment in the general insurance industry. Though sales of automobiles is growing at a good pace, premium realisations from motor insurance declines as the value of the vehicle decreases, not to mention the no-claims bonus, which further reduces premium rates. With competition, premium rates in health and marine insurance business have come down year-on-year. India is growing faster in the services sector. We see a boom in the IT, tourism and BPO sectors. However, little business comes from these sectors since the general insurance industry continues largely to be driven by insurance of physical assets of the manufacturing sector. New projects are more spoken about than being undertaken. With the manufacturing sector talking of expansion and brown-field projects, what kind of growth rate do you envisage for the insurance business this year? Premium rates have fallen in liability insurance business by 30 to 40 per cent in the past one ye
