New Delhi: Insurance penetration in India is expected to cross the 4% mark by the end of the year amid proliferation of insurance schemes, says a report.
“The insurance penetration has started its northward journey is evident from the fact that it has increased from 3.3% in 2014 to 3.44% in 2015 on the back of various insurance schemes launched by the government," said the Assocham report.
During the first decade of the sector’s liberalisation, there has been a consistent rise in insurance penetration from 2.71% in 2001 to 5.20% in 2009. However, since then, the level of penetration has been volatile and remained below the peak.
It declined from 3.9 to 3.3% in 2014 due to certain regulatory changes and unfavourable market conditions. India’s insurance penetration as a whole in 2015 was 3.4%, against the world average of 6.2%.
“Despite the gentle rise in insurance penetration which is percentage of insurance premium with reference to the Gross Domestic Product (GDP), it is still far below the global average," the report observed. “The number of lives covered under health Insurance policies during 2015-16 was 36 crore which is approximately 30% of India’s total population. The number has seen an increase every subsequent year as 28.80 crore people had the policy in the previous fiscal," it pointed out.
As part of social security initiatives, the government has launched low premium insurance schemes both life and non-life in 2015, it said, adding that last year, it introduced crop insurance. With the objective of providing insurance cover to all, the government launched Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJBY) in 2015.
PMSBY offers a renewable one-year accidental death-cum- disability cover of ₹ 2 lakh for partial/permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of ₹ 12 per annum per subscriber.
Besides, Pradhan Mantri Fasal Bima Yojana (PMFBY) launched last year to provide financial support to farmers suffering crop loss or damage arising out of unforeseen events will also add to insurance penetration, the report said.
PMFBY has been approved for implementation in all states and Union Territories from Kharif 2016 season in place of National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS).
“PMFBY is a significant improvement over the earlier schemes on several counts and comprehensive risk coverage from pre-sowing to post-harvest losses are some of the salient points. A budget provision of Rs5,501.15 crore has been made for the scheme for the current crop season," said Assocham president Sandeep Jajodia.