Hyderabad: The domestic insurance industry needs investments worth up to Rs 60,000 crore in next five years to increase the penetration levels substantially from the current 3.9 percent, Insurance Regulatory and Development Authority Chairman, T S Vijayan has said.
Vijayan also predicted that 2015 will be in a better position in terms of premium collection for all the three verticals of insurance industry - Life, Non-Life and Health.
"Our calculation was that, in the next five years, to increase the penetration, Rs 50,000 crore to Rs 60,000 crore is required. This was our calculation some time ago.
"When the sector started, it (insurance penetration in the country) was less than 2 percent. It has doubled to 3.9 percent now. I will not say it will double again. But there will be substantial growth (with the investments in the next five years)," Vijayan told PTI in an exclusive interview.
He, however, said the investment calculations have been based on several factors such as GDP growth, inflation figures, rupee stability and production numbers in the next five years.
The insurance regulator hopes the sector may have good growth numbers in FY16 when compared to the current year.
He said the new guidelines which were introduced in the current year for the life insurance industry has led to the consolidation and may witness growth next year.
"The year 2014 has been a sort of consolidation (for Life). Now it is stabilised. 2015 should be a very good year in terms of premium collection. Health insurance is doing well, though the penetration is very little. There is good growth.
"Non-life is also doing well. Down the year 2015, I believe though it is difficult to predict what is going to happen, all the three sector should see very good growth," he added.
Vijayan refused to predict the foreign investments that are expected to flow into the industry once the Insurance Bill is enacted.
The IRDA chief opined that there is a need to undertake campaign at mass levels to inculcate insurance culture among people.
The Jan-Dhan Yojana is an excellent programme for raising awareness of banking and there is need to have a 'Jan Bima Yojana' too to raise awareness of insurance, he added.
