Page 34 - Insurance Times March 2021

strengthen the primary, secondary and tertiary health to the legislative amendments to come into effect at the
centers is an essential step for health facilities to reach every earliest. Industry also welcomes the hassle-free pension for
nook and corner of the country. elderly citizens above the age of 75 years. The budget
proposal is likely to help local private insurers expand
There have been a lot of positives for the insurance industry presence in India which has one of the lowest penetration
in the Budget. Healthcare spends, vehicle scrapping, levels
spending on capex should all help the industry get back to
15% growth as seen during pre-COVID times and increase The government's proposal to increase the foreign direct
insurance penetration and density. Increasing the FDI cap investment limit in insurance from 49% to 74% is likely to
is a positive move for the insurance industry which will also accelerate growth and spur competition in the sector raising
enhance the overall performance of the sector. The increase hopes of a flux of foreign capital into private Indian insurers.
in FDI will give a huge boost to the insurance sector towards Greater capital infusion by foreign insurers in Indian joint
improving penetration and its product suite to cater to a ventures could eventually lead to the transfer of control to
nation of 1.3bn people. The diverse initiatives towards the cash-rich foreign partners. This can cause a fresh
upskilling, employment creation, ease of doing business and challenge for state-run Life Insurance Corp. of India or LIC,
improving investor confidence will cumulatively augur well which has a commanding 70% share of India's insurance
for the Indian economy and the general insurance sector in market. Insurance sector may also see an increase M&A in
the country. the sector while paving the way for private equity (PE) funds
to enter the space.
The Budget is focused on revival of economic growth and the
higher allocation to capital expenditure should support growth References:
revival and job creation. The FDI increase in insurance, 1. https://indianexpress.com/article/business/budget-
continuation of the disinvestment programme and ease of tax 2021-live-updates
compliance are welcome steps. Under the new structure, the 2. https://www.financialexpress.com/budget/union-budget-
majority of directors on the board and key management
2021-live-updates
persons would be resident Indians, with at least 50 per cent
3. https://www.indiabudget.gov.in
of directors being independent directors, and specified
4. HDFC Bank report
percentage of profits being retained as general reserve.
5. https://www.indiabudget.gov.in/doc/Budget_at_Glance/
Insurance industry applaud the significant step towards 74%, budget_at_a_glance.pdf
as this will provide a boost to the sector, and look forward 6. Newspapers & Journals

Fatal accidents blow to family income:Report

Every death in a road accident causes depletion of around seven months' household income in poor families, and pushes
the kin of victims into a cycle of poverty and debt in India, according to a new World Bank report. The report, "Traffic
Crash Injuries and Disabilities: The Burden on Indian Society", surveyed accident cases and corresponding families of victims
spread across four states - Uttar Pradesh, Bihar, Tamil Nadu and Maharashtra - that account for 35 per cent of road
accident deaths to find link between road crash fatalities and poverty, inequality, and vulnerable road users in India.
India has seen around 4.5 lakh road accidents resulting in at least 1.5 lakh deaths over the past few years. In the
survey, more than 75 per cent of poor households reported a decline in their income as a result of a road crash death.
Around 64 per cent of low-income households reported a deterioration in their standard of living (more than twice
reported by high-income households), while more than 50 per cent reported mental depression post-crash. Signifying
a clear gender impact of road accidents, the report found that women in the families of victims bore the burden of
the crashes across poor and rich households, often taking up extra work, assuming greater responsibilities, and
performing caregiving activities after a crash.
About 50 per cent of women were severely affected by the decline in their household income after a crash. About 40
per cent of women reported a change in their working patterns post-crash, while around 11 per cent reported taking
up extra work to deal with the financial crisis. The study, done in collaboration with NGO SaveLIFE Foundation, assesses
the social, financial, gender, and psychological impacts of road crashes on poor and disadvantaged households.

34 The Insurance Times, March 2021