Insurance reach may cross 4% by FY17-end: Assocham

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Mumbai | Published: February 16, 2017 4:48:07 AM

The Associated Chamber of Commerce and Industry of India (Assocham), in the latest paper, has revealed that insurance penetration in India is likely to cross 4% by the end of this financial year.

(Source: IE)The insurance penetration has started its northward journey and it 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. (Source: IE)

The Associated Chamber of Commerce and Industry of India (Assocham), in the latest paper, has revealed that insurance penetration in India is likely to cross 4% by the end of this financial year.

Growth in the insurance industry can be attributed to the government’s policy of insuring the uninsured by launching various schemes in the past few years.

The insurance penetration has started its northward journey and it 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.

As part of social security initiative and provide insurance cover to all, the government had launched Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) in 2015.

Crop insurance for the farmers was launched last year.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, according to Assocham paper.

PMSBY offers a renewable one-year accidental death-cum-disability cover of R2 lakh for partial/permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of R12 per annum per subscriber.

While PMJJBY offers a renewable one year life cover of R2lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of Rs 330 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.

“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 R5501.15 crore has been made for the scheme,” said Sandeep Jajodia, president of Assocham.

The number of lives covered under the 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 year, said the paper.

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