Insurance sector needs rs 50,000 cr. Capital per year to lift penetration: irdai.

January 23, 2023

The Insurance Regulatory and Development Authority of India (IRDAI) chief said the target is to double penetration in the next five years, and added that it is possible to insure all by 2047.
Insurance Penetration is the ratio of premium underwritten in a particular year to the GDP.
- It indicates the level of development of insurance sector.
- In India the overall penetration for insurance is 4.2% as of FY21-end with life insurance at 3.2%, and non-life at 1%.
- Insurance density (ratio of insurance premium to population) has increased from $78 in 2020-21 to $91 in 2021-22.
Reasons for low penetration:
- Lack of awareness,
- Lack of customised and standardised products,
- Fewer product innovations, etc.
How to enhance insurance penetration
- Make property insurance compulsory.
- Insurers should have bancassurance arrangements with non-bank lenders, co-operative banks and also payment aggregators.
- Financial sector participants should work together synergistically for deepening the penetration.
- Business conglomerates should channelise funds into the sector.