//Cashing in on fear in J&K

Cashing in on fear in J&K

SRINAGAR: Fear, it seems, can be encashed. Just ask the insurance companies, which are doing brisk business in Jammu and Kashmir. True, militancy is on the wane, but will good times last? That question is compelling people to seek cover for themselves and their livelihoods. And the insurance companies are cashing in.

Take thirty-year-old government officer Fayaz Ahmad Dar. He took out a life insurance policy for Rs150,000 five years back. He has also applied for the government’s ‘State Life Insurance’ scheme. In addition, his family has insured their house in posh colony for Rs20 lakh. 
"Grenades and gunfights can return any time in Kashmir," he explains. "The future is very uncertain and nobody knows what will happen. So I decided to cover the risk factor because I am always on the move." Insurance companies, of course, are not missing the plot.
Figures released by the LIC of India J&K Circle make telling reading. In 1997-98, the number of policy holders in Kashmir was 27526, with the sum assured at Rs182.77 crore and Rs621.77 lakh premium income generated. In 2002-03 the policy holders grew to 44207 with sum assured Rs344.76 crore. The premium income generated was Rs1394.32 lakh.
In the last financial year their number of policy-holders decreased because of the advent of other companies in Kashmir. Yet, the number of policy-holders stood at a healthy 39750, while the sum assured was Rs337.61 crore and the premium income generated Rs2921.51 lakh.
If the whole of Jammu and Kashmir is taken as a unit, then policy holders number 119,924, with the sum assured at Rs971.97 crore and the premium income pegged at Rs8563.13 lakh in 2004-05.
These are the business figures of just one company. There are several players in the insurance sector now. Bajaj Alianz and Met Life insurance have tied up with Jammu and Kashmir Bank for instance.
Met Life, which entered into a strategic partnership with J&K Bank three years ago, has been able to grab a sizeable chunk of the market. The number of policy holders has increased to 23700 and J&K Bank has earned the premium income of Rs33.80 crore. Similarly Bajaj Alianz and J&K Bank have earned Rs52 crore premium income in non-life insurance sector. J&K Bank has earned Rs seven crore as its share of premium income by 2005.
Insurance industry sources say the sector is growing at more than 25 per cent annually in the state, which is the highest in the country. "There are so many factors for growth in insurance sector." says Sanjay Verma, Senior Divisional Manager of LIC, J&K Circle. "Risk factor is among the reasons that drive people to have their lives covered by insurance. Other factors include the growing awareness and economic integration of Kashmir with the rest of the country."
Mohammad Ayub Kanth, joint general manager of J&K Bank in-charge of insurance department, expands: "Our insurance sector is growing at 20 per cent annually. We plan to put forth a suggestion to our partners to devise packages for J&K which will suit our people in the current circumstances."
Sociologists say the growing insurance sector in Kashmir reflects the mood in the conflict zone. "There is a feeling that anything can happen. Society cannot be oblivious and that is why the people go for insurance cover," says Prof Bashir Ahmad Dabla, head of the department of Sociology, University of Kashmir. Dr Ghulam Mohidin Malik, who teaches psychology in University of Kashmir, agrees. "People have seen others being killed and no body taking care of their families. This feeling has seeped  into the minds of the people and therefore they want to be on the safer side."

Economists though see another reason for growing insurance sector, namely the rise in incomes. "Some sectors like real estate have boomed," says says Prof Nisar Ali, head of the department of Economics, University of Kashmir. "This has also contributed to the growing insurance sector as more and more people not only insure their lives but also property."