During the first decade of insurance sector liberation, the sector reported a consistent increase in insurance penetration from 2.71 per cent in 2001 to 5.20 per cent in 2009. However, since then, the level of penetration has been declining and reached to 3.96 per cent in 2012 which is much below the global average of 6.5 per cent of GDP. The density of insurance business has gradually increased from 11.50 in 2001 to 64.40 in 2010. Since then, the density has shown falling trend and recorded at 53.20 in 2012-13. The predominant reasons for the fall in the life insurance business is declining premium collections and the regulator tightening the rules governing this sector followed by decline
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