Boost Coverage In India?

Will standard insurance products be the magic pill to boost coverage in India?

Standard insurance products are a good start for new entrants to the insurance fold.

But these alone may not be adequate to boost India’s insurance penetration.

Boost Coverage In India?

Term insurance, accident insurance, fire insurance and home insurance.

These are some of the standard insurance products (apart from the April 1, 2020-launch standard health plan).

That will be available for Indian insurance customers from 2021 onwards.

Insurance Regulatory and Development Authority of India (IRDAI) launch these products to ensure that there are easy to understand policies for mass-market customer.

But will this be the magic pill need to bridge the insurance gap in the country.

Boost penetration of products?

India has consistently face the challenge of low insurance penetration and density even 21 years after privatization.

When it comes to the insurance penetration and density.

The figures for India were flat as per the Swiss Re’s sigma report.

This data showed that insurance density.

Which is premium per capita stood at $78 (approximately Rs 5,850) in FY20 compared to $74 (approximately Rs 5,550) in FY19.

The world average in FY20 was $818 (Rs 61,350 approximately).

Similarly, insurance penetration (premiums as a percentage of gross domestic product) stood at 3.76 percent in India for FY20.

Here, life insurance penetration was at 2.82 percent while that for non-life stood at 0.94 percent.

The world average was 7.23 percent with 3.55 percent for life and 3.88 percent for non-life insurance.

The most common reason cited for these poor numbers

India are lack of awareness and inadequate distribution reach apart from low disposable income to buy insurance products.

The government-sponsored term insurance.

Accident insurance under the Jan Suraksha Yojana with Rs 2 lakh cover each was a good starting point for a lot of uninsured Indians.

However, this scheme hasn’t motivate Indians to buy higher covers on their own nor has it been use as platform by insurers to cross-sell proper covers.

Boost Coverage In India?

IRDAI’s vision is to nudge customers to buy simple products if they find the barrage of products on offer by companies to be confusing.

An added concern could be possible misspelling of inappropriate policies to unaware customers.

But will insurers be open to sell these standard plans at the cost of their other specific policies?

For example, insurers have been reluctant to sell the standard health plan Arogya Sanjeevani.

Instead, they have primarily been selling their own health plans that have a similar cost structure.

Insurers’ justification is ‘we have similar plans with better features’ while clarifying that customers are free to buy what they want.

It is to be seen whether the standard term, home insurance and personal accident products suffer the same fate.

When the competition is between a me-too product and one’s own insurance policy.

Boost Coverage In India?

Companies opt to sell the latter

For customers, these standard policies could be a good first step into the world of insurance.

Once they have experienced these plans (read claims settlement).

An insured could be motivated to buy a higher and comprehensive cover based on his/her needs.

However, this would require additional efforts from the distributor.

(Agent or bank officials) to stay in contact with the customer and understand their needs better.

This will help these intermediaries suggest a need-based product over and above the standard policy.

The initial optics look good for these standard plans.

But the key lies in distribution.

Customize insurance product offerings for customer groups for the coverages to really improve across India.

Follow us on INSTAGRAM:

33 Instagram Marketing Statistics for 2018 | DrumUp Blog

Follow us on FACEBOOK:

14 thoughts on “Boost Coverage In India?

  1. Wow, marvelous weblog format! How lengthy have you ever been blogging for? you made blogging glance easy. The total look of your site is fantastic, as smartly as the content material!!

  2. Does your site have a contact page? I’m having trouble locating it but, I’d like to shoot you an e-mail. I’ve got some suggestions for your blog you might be interested in hearing. Either way, great site and I look forward to seeing it grow over time.

  3. Hey there just wanted to give you a quick heads up. The text in your post seem to be running off the screen in Chrome. I’m not sure if this is a formatting issue or something to do with internet browser compatibility but I thought I’d post to let you know. The style and design look great though! Hope you get the issue solved soon. Many thanks

  4. I have been surfing online more than 3 hours today, but I never discovered any interesting article like yours. Its lovely price enough for me. Personally, if all website owners and bloggers made good content as you did, the net will likely be much more useful than ever before.

  5. I blog usually as well as I truly appreciate your web content. This excellent write-up has certainly peaked my passion. I am going to book mark your website and also keep checking for brand-new details with regards to when a week. I opted in for your RSS feed as well.

  6. Hi would you mind letting me know which web host you’re working with? I’ve loaded your blog in 3 completely different web browsers and I must say this blog loads a lot faster then most. Can you recommend a good internet hosting provider at a reasonable price? Many thanks, I appreciate it!

Leave a Reply

Your email address will not be published. Required fields are marked *