Wed. Jul 24th, 2024

Women buy one out of every three life insurance policies in India, despite the fact that the insurance business is undergoing a major change in the aftermath of the Covid-19 outbreak.

Although India’s life insurance adoption is equivalent to that of Asian counterparts at 2.8% of GDP, the disparity in coverage is frighteningly high, particularly among women. A large majority of them are unaware of the value of life insurance and the products it offers. Women have emerged as pivotal benefactors to a family’s wealth and future financial aspirations. However, we do not pay enough attention to the hazards that exist in a woman’s life, which are often much greater than those in a man’s. As a result, it is obvious that women should recognize their importance in the lives of their family members and choose measures that provide security against life risks. This can serve as a rainy day fund, and will also meet her and her family’s financial goals in the long run.

Per a study conducted by the State Bank of India’s Economic Research Department, the number of plans sold to women in FY21 is estimated to be over 93 lakhs, representing 33% compared to 32.23% in FY20.

According to the report published by Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI, the share of insurance on women in the context of private life insurers is 27% and that of LIC is 35%.

In 19 states/UTs, women purchased more insurance than the male population, outnumbering them by a margin more than the national average of 33%.

The absorption of Insurance as a product in India rose from 2.71% in FY01 to 5.20% in FY09 as a result of liberalization, but it had also fallen to 3.30% in FY14.

However, thanks to the strong government assistance and universal insurance programs – Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana (PMJJBY, PMSBY), insurance penetration began to rise again in FY15 and is now at 4.20% in FY21.

Despite the COVID-19 epidemic, the insurance industry demonstrated incredible tenacity, with only tiny dips in premiums and a rapid recovery. The pandemic lockdowns had an influence on the industry, which was mostly dependent on the functioning of the agents.

The outbreak also changed people’s perceptions of insurance. For starters, it made individuals aware of the importance of health insurance plans and the necessity for enough coverage, improved features, and seamless services. As a result of this awareness, more customers got themselves freshly baked policies or ported to insurers that provided greater coverage and claim processing.

In FY21, death claims received by the life insurance companies grew by 40.8%, which is approximately Rs 41,958 crores. The pandemic has been the integral yet devastating reason for such soaring numbers.

With digitalization, the amount of policies issued through online and digital aggregators is just 1.9% in terms of premium volume and roughly 1.6% in terms of the number of policies, according to the research.

According to the SBI Ecowrap, Bancassurance – where insurance goods or services are provided to bank clients – is a booming avenue. The percentage of premium revenues has grown from 16.6% in FY14 to 29% in FY21. For private insurers, Bancassurance has around 55% share of the market.

Non-life insurance company agents serve a vital position, with their share of total premium increasing from 21.9% in FY14 to 31.4% in FY21.

Compulsory enrollment of MGNREGA employees in PMJJBY and PMSBY, rationalization of the 18% GST on insurance plans, and closing the coverage gap in accordance with Jan Suraksha, according to the research, might increase insurance penetration even further.

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