New Delhi, Oct 22
With premiums exceeding Rs 10.4 lakh crore in FY23, the insurance market in India increased at an amazing 15% compound annual growth rate (CAGR) over the previous 20 years. Industry analysts stated on Wednesday that there is still a great deal of unrealized development potential.
According to a report by KPMG in India in partnership with the Confederation of Indian Industry (CII), despite the steady growth, there is still a significant amount of room for further expansion and development, as evidenced by the country’s insurance penetration rate of 4%, which is much lower than the global average of 6.8%, and the $40 billion protection gap.
A favorable regulatory environment and supportive government measures have been essential in increasing insurance penetration. Programs such as the Pradhan Mantri Jan Arogya Yojana (PM-JAY) have increased coverage for the underprivileged and marginalized groups in society.
The study emphasized the urgent need for creative insurance solutions to handle changing risks, such those brought on by climate change, especially for the agriculture industry, which is becoming more and more susceptible to catastrophic weather occurrences.
India’s insurance industry is about to embark on a new adventure with the goal of insuring over a billion people. According to Hemant Jhajhria, National Head of Consulting at KPMG in India, “Digital-first innovative business models can significantly bridge the protection gap and move us closer to the vision of ‘Insurance for All’ by 2047.”
In order to improve the policyholder experience and guarantee insurance accessibility and availability, we need now concentrate on creating customer-centric solutions and utilizing digital technology, said Chandrajit Banerjee, Director General, CII.
In order to improve financial inclusion and increase insurance coverage among underinsured and marginalized consumer segments, the paper also examined the possibilities of integrating digital payment systems and utilizing publicly funded digital infrastructure.
It emphasized that in order to fill the protection gap and deal with the difficulties brought on by changing risks like climate change, the business requires micro-insurance and parametric insurance solutions, especially for the unorganized sector like individual farmers.
