According to a report published by Yes Bank and an industry body in November 2009, the medical insurance sector would account for US$ 3 billion in the next three years.

Health insurance premium collections touched US$ 1.45 billion in 2008-09 compared with US$ 1.13 billion in the previous year, IRDA said in its annual report for 2008-09.

Moreover, total premium between April and December 2009 was US$ 1.35 billion, up from US$ 1.12 billion, an increase of 20 per cent, as per figures released by the regulator.

Bancasssurance

Private insurers have adopted bancassurance in a much bigger way than the state-owned Life Insurance Corporation (LIC) in recent years. Bancassurance is distribution of insurance products through a bank's network.

In 2008-09, private insurers forked out US$ 44.64 million as commission for bancassurance, while the payout by LIC for this distribution model was only US$ 26,075, as per official data.

According to Towers Watson India, Bancassurance Benchmarking survey 2009-10, released in May 2010, bancassurance will play a crucial role in the overall development of the Indian insurance sector with the channel expected to generate 40 per cent of private insurers premium income by 2012, compared to the current 25-28 per cent. In general insurance, presently 17 per cent of premium income comes from bancassurance.

Investments

• The Indian insurance unit of Dutch financial services firm ING plans to invest US$ 51 million in 2010/11 to fund expansion in India.
• Private life insurer Future Generali India will expand its distribution network by opening around 100 branches in addition to its existing network of 91 branches during 2010. It will also increase the agency force by 21,000 to 65,000 people.
• Max Bupa, the health insurance JV between UK's Bupa and the Max Group plans is set to invest a further US$ 134.9 million in its health insurance segment over the next five years. Besides the existing six cities, it plans to foray into Surat, Jaipur and Ludhiana by the end of 2010.

Investment Policy

• According to a guidance note released by IRDA, the regulator has increased the lock-in period for all unit-linked insurance plans (ULIPS) to five years from the current three years, thereby making them long-term financial instruments, which basically provide risk protection. The commission and expenses have also been reduced by evenly distributing them throughout the lock-in period. Moreover, IRDA said that insurers will provide a mortality cover or a health cover to all ULIPS, other than pension and annuity products, thereby increasing the risk cover component on them.
• IRDA has ordered life insurers to offer customers a guaranteed return of 4.5 per cent per annum on pension and annuity plans.

Exchange rate used: 1 USD = 46.38 INR (as on June 2010)