Insurance penetration in India is expected to cross the 4 per cent 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 per cent in 2014 to 3.44 per cent 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 per cent in 2001 to 5.20 per cent 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 per cent in 2014 due to certain regulatory changes and unfavourable market conditions.
India’s insurance penetration as a whole in 2015 was 3.4 per cent, against the world average of 6.2 per cent.
“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 per cent 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.