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INSURANCE SECTOR IN INDIA (Background (the insurance gap has widened from…
INSURANCE SECTOR IN INDIA
Background
the insurance gap has widened from $19.7 billion in 2012 to $27 billion in 2018, even though non-life insurance penetration has improved marginally from 0.7 per cent of Gross Domestic Product (GDP) in 2012 to 0.9 per cent as of 2018
India currently accounts for less than 1.5 per cent of the world’s total insurance premiums and about 2 per cent of the world’s life insurance premiums
India’s life insurance sector is the biggest in the world with about 360 million policies
insurance industry plans to hike penetration levels to five per cent by 2020
India had also increased FDI limit to 49 per cent from 26 per cent in insurance sector
Role of Insurance
Provide safety and security
Generates financial resources
Promotes economic growth
Spread of financial services in rural areas
Challenges in Insurance Sector
Low Awareness
Poor Distribution
Fewer product innovations
Pricing
Perception by influencers
Way forward
Promote Awareness
Multiple Channels of Distribution
Huge Untapped Market
Better regulation
Use of Technology