{"id":129,"date":"2017-09-01T09:08:17","date_gmt":"2017-09-01T09:08:17","guid":{"rendered":"http:\/\/www.adlift.com\/in\/?post_type=blog_post&p=129"},"modified":"2022-10-18T07:15:42","modified_gmt":"2022-10-18T07:15:42","slug":"insurance-india-gaps-insurance-promotion","status":"publish","type":"blog_post","link":"https:\/\/www.adlift.com\/in\/blog\/insurance-india-gaps-insurance-promotion\/","title":{"rendered":"Insurance in India and Gaps in Insurance Promotion"},"content":{"rendered":"

\u201cInsurance should be perceived not only as a protection mechanism but more importantly as a partnership that allows individuals and businesses to spread their wings and go where they might otherwise not have dared to go.\u201d<\/em><\/p>\n

\u2013 Geneva Association, The Social & Economic Value of Insurance, 2012<\/p>\n

\"F1\"<\/p>\n

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Insurance has been a mechanism of risk management for more than two centuries now. Yet, the level of attention it receives from relevant people (who can benefit from it) is far from satisfactory. Even a developing country like ours has seen more than 70 years of insurance in practice, and yet we stand far behind from the world average when it comes to widespread coverage of the population.<\/p>\n

In this article, we will try to examine the possible causes for this dismal proliferation of insurance within our country and the world. We would like to present some relevant solutions that can be applied to the changing environment to improve the same in these markets, including India.<\/p>\n

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The Social & Economic Importance of Insurance<\/strong><\/p>\n

The 2012 paper, The Social & Economic Value of Insurance by Geneva Association<\/a> has defined insurance<\/strong> and its social position very well.<\/p>\n

\u201cInsurance tends to address both hope and fear, the two most fundamental and connected human emotions. This way, insurance is an intrinsic part of a developed society. Insurance has the potential to save businesses from disappearing and families from falling into the cycle of poverty.\u201d<\/em><\/p>\n

For example, a family being paid a large sum to continue their lives as it was, even after the death of the breadwinner, or business being compensated for the lost consignment for which the buyer will never pay.<\/p>\n

Insurance has more pervasive value for the economic sustenance of today\u2019s society than it is given credit for. It is even much maligned.<\/p>\n

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Insurance Penetration in India vs the World<\/strong>
\nThe insurance penetration is a measure used as a measure of the insurance proliferation within the country or an economic region. It is a ratio of insurance premium collected in dollar value to the dollar GDP of that country.<\/p>\n

\"F2\"<\/p>\n

The world average for the insurance penetration has been around 4.5%. While Indian insurers have been able to touch that only once, few South Asian countries have been able to go far ahead.<\/p>\n

Another measure of success for insurers is the insurance density; i.e. per capita premium collection in the country, where we lag behind all European, Asian and American countries. At $43.2 per capita, it is better than Asian economies excluding China, Japan & Taiwan.<\/p>\n

\"F3\"<\/p>\n

Reasons for Low Insurance Penetration<\/strong><\/p>\n

A Pre-launch Survey Report published by NCAER (National Council of Applied Economic Research) and IRDAI (Insurance Regulatory Authority of India), gave few insights into the reasons why insurance penetration is low in this country.<\/p>\n

But, before we can explore this question, another question might arise in your mind, \u201cShould insurance penetration be any higher, given the literacy levels and awareness about it?\u201d<\/em><\/p>\n

The answer is surprisingly positive. Insurance penetration should be higher given the literacy levels and awareness about it. The report clearly shows that people, whether insured or uninsured, are aware of the basic concept of insurance and its usefulness in their lives.<\/p>\n