The premiums collected from this coverage sector have dropped by 2.33 percent compared to 2011.
The latest life insurance news from India is that premiums collected during the third quarter, which ended on September 30, have experienced a year over year decrease by 2.33 percent, said the most recent report of the Insurance Regulatory and Development Authority (IRDA).
This drop has been blamed on the overall slowing in economic growth.
This, according to Namo Narain Meena, the Minister of State for Finance. The minster explained that as a whole, there are many different factors that came together to explain the decline in collected life insurance premiums. However, Meena did not go on to provide any specifics to give a better idea of what those factors might be.
Meena feels that the life insurance premiums droop is due to the same factors causing the financial slump.
In a statement, the minister explained that “The reasons for a negative growth in the premium collections are various factors that are influencing the financial sector as a whole.” The recent financial industry strain has not been an island unto itself. The economic elements that have been holding it back are far reaching and are also hindering the successes in the life insurance industry.
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She said that the IRDA’s data indicates that among the 44,191,864 life insurance policies that were issued within the last fiscal year, approximately 13,983,265 (which represent 31.64 percent of the total number of policies in the country) were sold in rural regions. The government has put several programs into place to help to cater to individuals in these areas and who are facing financial struggle.
According to Finance Minister P. Chidambaram, in a recent statement, the economic growth’s current slowing has had a negative impact on many different areas, including financial institutions such as banks, as well as the performance of other areas that depend on some of the same economic influences.
The public sector banks non-performing assets (NPAs) have recently experienced a sharp spike, over the last few quarters, due to the weak economic growth. This has also held the life insurance sector back from being able to live up to its full potential.