Life insurence industry made loss in 2009-10

life insurance industry in the country made a total loss of Rs 988.82 crore in the financial year 2009-10, according to the latest annual report of Irda. But the more pertinent point is that the industry has reduced its loss by a whopping 80 per cent from net loss of Rs 4,883 crore in 2008-09.

During 2009-10 is that among 23 private sector companies — the only public sector company is Life Insurance Corporation , 8 companies have reported positive bottom line against 4 in the previous financial year.

Significant improvement in profitability was revealed by some of the companies. Of course, LIC has highest profit of Rs 1060.72 crore in 2009-10, jump of 11 per cent. Among private players ICICI Prudential has turned around with net profit of Rs 258 crore, Bajaj Alianz with Rs 542 crore and SBI Life Rs 276 crore.

Reducing losses by life insurance companies is big news because it is an industry where breakeven takes between 7 to 10 years and companies which are becoming profitable started about 10 years ago when the government opened up insurance for the private sector. Apart from long turnaround time, life insurance is also a cash-hungry business as private sector companies have already coughed up Rs 21,014 crore towards share capital till the end of 2009-10.

Bharti AXA Life launches Aajeevan Anand

private sector insurance company Bharti AXA Life Insurance today launched Aajeevan Anand plan that provides guaranteed regular payouts after every 5 years and life cover until the age of 100 years.

"Aajeevan Anand is a powerful financial solution that provides guaranteed regular payouts to meet various life stage needs until the age of 100," Bharti AXA Life Chief Marketing and Operations Officer (CMOO) Mark Meehan said.

In addition to these lifelong paybacks, the product provides customers with life cover and hence is an ideal savings cum protection plan, he said.

This whole life plan is apt for salaried people since all premium payments are made in the first 10-15 years of the policy, he added.

The nominee of the policy holder would get sum assured in case of death during the policy period which is 100 years.

Bharti AXA Life is 74:26 joint venture between Bharti Enterprises and AXA of France.

India having the most versatile Insurance industry

India has registered a tremendous economic growth over the last decade and the insurance sector has grown with it.

India boasts one of the most versatile insurance industries in the world going by the number of insurance policies on offer and continues to portray huge potential.

Today, according to market survey, the insurance sector in India together with the banking industry contribute about a sizeable seven percent of the country’s gross domestic product not to mention that the government owned Life Insurance Corporation (LIC) has access to funds equaling eight percent of the country’s GDP.

Valuated at $10 billion, the insurance industry in India received major encouragement when in 1999 the government of India put an end to its monopoly on the sector by passing the Insurance Regulatory and Development Authority (IRDA) Bill which did away with all barriers on the entry of private investors besides allowing for foreign investors to come on board with however some limits on direct ownership.

Foreign investors are allowed up to twenty six percent ownership in any insurance company although there is a bill pending that seeks to have this figure increased to forty nine percent.

This however has not slowed down the amount of foreign investment since government records show that in that decade the sector has benefited from an injection of up to $193 million dollars while witnessing the inception of twenty seven new insurance companies. The economy in India has gained from this.

The sector derives its success from the fact that most Indian citizens view life insurance as a way to pay less tax and with innovative insurance products and aggression from the competing insurance companies the sector continues to register new clients at an impressive rate. It is no wonder that most state banks in India include insurance services among their products.

The insurance sector can largely be divided into two sub sectors namely life insurance and the non life insurance. The LIC continues to dominate the life insurance sector and has been recording average annual growths ranging at about thirty five percent although the non life insurance sector is doing much better with growths of more than a hundred percent in the same breath over the last few years.

The huge potential for the sector is mainly underlined by the fact that only about a fifth of India’s insurable population has life insurance cover which presents huge avenues for growth in the near future.

india's Q2 gdp

India's economy grew a faster-than-expected 8.9 percent in the September quarter from a year earlier, government data released on Tuesday showed. The economy grew at 8.8% during the previous quarter.

Q2 mining output was at 8% whereas energy output was at 3.4%.

The growth estimates got a leg up as the industrial sectors, which account for approximately 20% of the overall GDP, got a boost in the second quarter due to the lower inflation numbers under the new series.

Lower inflation numbers gave a statistical boost to industrial growth estimates and national income numbers, compared with those estimated using the old series.

Rupa Rege Nitsure, Chief Economist, Bank of Baroda , said: "This indeed is a very strong reading despite the fact that we had seen some easing of industrial production in the second quarter. With this reading, achieving a 8.5 percent for full year growth target is not going to be difficult. From a market perspective, this means that India will attract more capital inflows and it will put upward pressure on the rupee."

"From the central bank perspective, this data will enable them to concentrate on inflation management. I expect the Reserve Bank of India to continue caliberating monetary policy. I expect another 25 basis points increase in both repo and reverve repo rates in the December policy and depending on the intensity of capital flows that the country attracts, there is a strong possibility of a CRR (cash reserve ratio) hike in the fourth quarter," added Nitsure.

Annual headline inflation eased to 8.58 percent in October from a year earlier, lowest in last 10 months. Asia's third-largest economy is expected to grow 8.5 percent in the current fiscal to March 2011.

The economy, which had grown more than an annual 8 per cent in the last two quarters, has been riding on robust manufacturing activity and the outlook for farm output has brightened following good monsoon rains.

The central bank's next monetary policy review is on Dec. 16. Analysts polled by Reuters expect the RBI to raise rates by an additional 25 basis points by the end of the fiscal year that ends in March.


India's economy grew a faster-than-expected 8.9 percent in the September quarter from a year earlier, government data released on Tuesday showed. The economy grew at 8.8% during the previous quarter.

Q2 mining output was at 8% whereas energy output was at 3.4%.

The growth estimates got a leg up as the industrial sectors, which account for approximately 20% of the overall GDP, got a boost in the second quarter due to the lower inflation numbers under the new series.

Lower inflation numbers gave a statistical boost to industrial growth estimates and national income numbers, compared with those estimated using the old series.

Rupa Rege Nitsure, Chief Economist, Bank of Baroda , said: "This indeed is a very strong reading despite the fact that we had seen some easing of industrial production in the second quarter. With this reading, achieving a 8.5 percent for full year growth target is not going to be difficult. From a market perspective, this means that India will attract more capital inflows and it will put upward pressure on the rupee."

"From the central bank perspective, this data will enable them to concentrate on inflation management. I expect the Reserve Bank of India to continue caliberating monetary policy. I expect another 25 basis points increase in both repo and reverve repo rates in the December policy and depending on the intensity of capital flows that the country attracts, there is a strong possibility of a CRR (cash reserve ratio) hike in the fourth quarter," added Nitsure.

Annual headline inflation eased to 8.58 percent in October from a year earlier, lowest in last 10 months. Asia's third-largest economy is expected to grow 8.5 percent in the current fiscal to March 2011.

The economy, which had grown more than an annual 8 per cent in the last two quarters, has been riding on robust manufacturing activity and the outlook for farm output has brightened following good monsoon rains.

The central bank's next monetary policy review is on Dec. 16. Analysts polled by Reuters expect the RBI to raise rates by an additional 25 basis points by the end of the fiscal year that ends in March.