In a first advisory, the Insurance Regulatory and Development Authority of India (Irdai) has a plan to get premium growth targets over a five-year period for life insurance companies, in addition to double insurance penetration in the country. In e-mail communications to the MDs and CEOs of life insurance companies, the insurance regulator has suggested a gross written premium (GWP) growth target for each insurer. While I.R.D.A.I has proposed a target of 35 per cent compound annual growth rate (CAGR) over five years for top insurance companies because of their large base, it has suggested 50 per cent CAGR for smaller and tiny companies.
“Irdai has given each life insurer indicative targets in terms of total GWP for the next five years,” said Rushabh , deputy CEO, India First Life Insurance, “It has also offered to discuss any regulatory support that the insurer may need to meet the target. Overall, this will help increase the insurance penetration in the country growth fast.”
GWP means is the sum of new business premium and renewal premium. The regulator has also identified a state for each insurer where it should spearhead the push for increased insurance penetration.
“Irdai has sent separate e-mails to individual companies prescribing growth targets. All life insurance companies have been given targets. The regulator aims to grow insurance penetration in the country over the next five years. The insurance penetration as a percentage of GDP is low and the government wants to double it in the next five years. If every insurance company gains surplus profits, the overall insurance penetration will certainly increase,” CEO of a life insurance company , said.