General Insurance Council eyes 2.5% non-life insurance penetration by 2030

The General Insurance (GI) Council is targeting a 2.5 percent non-life insurance penetration (as percentage of gross domestic product) by 2030.

The GI Council is also eyeing premium collection of Rs 4 lakh crore by FY25. The figure stands at Rs 2 lakh crore at present. Non-life penetration stood at 0.97 percent in FY19. To increase awareness about non-life insurance, GI Council, the apex body of general insurers, with support from the Insurance Regulatory Authority of India (IRDAI), has also launched an awareness and education campaign - Faayde Ki Baat.

Under this campaign, GI Council aims to increase awareness about General Insurance and at the same time educate people on how to safeguard themselves and their assets especially their health, home and motor vehicle. The life insurance sector already has an awareness campaign titled 'Sabse Pehle Life Insurance'. This was an initiative of the Life Insurance Council.

Faayde Ki Baat campaign is in line with the current focus area for GI Council to spread awareness amongst consumers on the importance of non-life insurance as a risk management instrument. Over the past two decades, the non-life industry has grown at a CAGR of about 17 percent and the industry premiums are expected to be about Rs 2 lakh crore for the year ending March 31, 2020, up from about Rs 10,000 crore in 2000-01.

Though the penetration (non-life) in this period has increased from about 0.5 percent of GDP (in 2000) to ~1 percent of GDP (presently), this is far below the Asian penetration of 1.85 percent and global penetration of 2.8 percent to GDP. Both motor and health insurance have a gap between what it is needed and what is purchased.

IRDAI's last published data shows that only about 4.2 crore individuals have a retail health policy. India's health spends are under 4 percent of GDP compared to global average of ~10 percent. At the same time, out-of-pocket spends are ~65 percent compared to global average of ~18 percent. In motor, about 50 percent of vehicles are uninsured. The home insurance penetration is very low. The share of Indian non-life insurance premium to global premium is at about 1.1 percent and India is ranked 15th in global non-life insurance markets.

AV Girija Kumar, Chairman, GI Council, said that the idea is to help deepen the reach of personal lines of business of non-life insurers and focus on smaller towns.

Source: Money Control