New Delhi: For every $100 needed for protection, only $7.8 of saving and insurance is in place for a typical Indian household, leaving a massive mortality protection gap of $92.2, says a study by Swiss Re.
In India, the size of the mortality protection gap is significant at $8,555 billion in 2014, having grown by 11% per annum between 2004 and 2014, reinsurance major Swiss Re said. Mortality protection gap represents the difference between the cover typically required by a family and the resources they have available should a wage-earner pass away suddenly.
The study says insurance has grown strongly in India but from a very low base and in 2014, India had life insurance penetration rate of 2.6% of gross domestic product. It further showed that the sum insured per working person with dependants in India was still low at $2,101 in 2014 (about Rs 1.3 lakh).
India ranked ninth with respect to per capita sum insured in 2014, among 13 Asia-Pacific markets examined, the study said. It further noted that the increase of foreign investment limit in Indian insurers to 49% from 26% in 2015 presents more opportunities for insurers to help close this gap.
The Swiss Re Group is a leading provider of reinsurance, insurance and other insurance-based forms of risk transfer.