Page 19 - The Insurance Times October 2021

4th Prize Winner : Technical Paper Writing Contest 2020 Cover Story

WHAT CHOKES THE

LIFE INSURANCE

INDUSTRY OF INDIA

-ANSWERS ARE

HIDDEN IN DATA

L ife Insurance industry finds it difficult to realise its Insurance Statistics, 2017-18, we find that the total Sum

full potential. With the Insurance Penetration
Assured in force was 1,25,67,942.89 crores of Rupees (in the
hovering around 2.70 for quite some time and
Handbook of 2018-19, this statement is yet to be uploaded).
Insurance Density stumbling at around 55 USD
is found to be 33,14.85,000. If we assume that about twenty
(source: IRDAI Annual Report, 2018-19), the industry does In a separate statement, the total number of policies in force
not look like the one pertaining to an economy aspiring to five crores of Indians own in force individual life insurance
be of 5 Trillion USD. Most of the developed and emerging policies at the moment (as many of them are holding multiple
countries have Insurance Penetration and Density much policies), that will not perhaps be too wrong an assumption.
higher than us. Now, this is happening when India is one of And in that case, each insured person is found to be covered
the fastest growing economies of the world and will by a sum assured of only 3.78 lacs of Rupees on an average.
continue to be so for many more years. According to an This is no way near the Human Life Value (HLV) of an average
estimate by Bain & Co., already 54% of Indians can be Indian.
considered as belonging to "Middle-Class". Then there are
High Net Worth Individuals segment (3%), requiring very According to Ministry of Statistics and Programme
heavy insurance protection against various risks. Implementation figures, India's per capita income was Rs.
1,42,719 in 2018-19 at current prices. Even if we assume
Let's see how many Indians are insured at the moment. If that the average Indian has twenty years of working life left
we look at one statement of the Handbook of Indian (that being a realistic assumption given the present
demographic features of the country), her HLV comes out
About the author to be around Rs. 26 lakhs of rupees (without considering
interest rate, inflation rate and chance of growth of income).

Nirjhar Majumdar Now, we can make out how grossly underinsured we are.
Even a low cost (Rs. 330 per annum) government sponsored
LIC of India
Pradhan Mantri Jeevan Jyoti Bima Yojona (PMJJBY) offers a
The Insurance Times, October 2021 19