The Indian insurance industry is booming with a record 35 percent growth in its premium income during the last financial year, according to a survey.

While the 13 private sector players walked away with an impressive 129 percent growth, the government-owned Life Insurance Corporation (LIC) recorded a 21 percent growth, said a statement from the industry lobby Assocham (Associated Chambers of Commerce).

Thus the market share of the state behemoth dropped to 78 percent in 2004-05 from 87 percent a year ago, according to the survey.

The Assocham Eco Pulse (AEP) Study found that the industry premium increased to Rs.253 billion in 2004-05 from Rs.187 billion in 2003-04. The LIC's total premium for the year 2004-05 amounted to Rs.197 billion as against Rs.162 billion during the previous year.

The figures for the first two months of the fiscal 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent.

"With the huge potential the market has, the government should more seriously look into increasing the FDI (foreign direct investment) cap in the sector," said Assocham president Mahendra K. Sanghi.

Among the private players, ICICI Prudential is the market leader with a 6.25 percent market share during the said period followed by Bajaj Allianz that recorded a 3.63 percent market share.