Page 31 - The Insurance Times October 2021

OPTIMISM ON

STANDARDISATION

OF PRODUCTS

BOOST INSURANCE

PENETRATION

I ndia is a hugely under-insured country, where only 19 shrunk 20 percent in dollar terms. One of the most promising

solutions that the Insurance Regulatory and Development
per cent of lives are insured. In the case of vehicles,
although third party insurance is mandatory, only 79
Authority of India has recently come out with is the
per cent of four-wheelers are covered and 66 per cent
four-wheelers are insured for own-damage only. For two- Standardisation of Insurance products. With this move of
standardising complex insurance policies, IRDAI has
wheelers, it is much worse, as only 36 per cent of vehicles enhanced consumer buying in today's time. The insurance
are insured under third party and 39 per cent are covered industry in India mainly consists of three stakeholders: life
for own damage. Unfortunately, insurance is a notoriously and non-life (general) insurance companies, customers, and
complicated subject in India with dozens of different plans the regulator IRDAI, apart from the sole national reinsurer
and top-ups. While life penetration has increased from 2.8 General Insurance Company of India. The life insurance
percent to 3.2 percent, the non-life play has increased to 1 sector captures 75% of the market share and accounts for
percent from 0.94 percent last year. 50% of the insurance companies in India.

In non-life, India's ranking has improved by one place despite Standardised products usually cater to a category of
premium shrinking in dollar terms. This is because Brazil, customers, especially the first-timers. However, we must
which was in 13th place, slipped sharply as its business remember that most insurance products in India are push
products and the success of the standardized plans
About the author significantly depends on how well aware consumers are
about these plans. With intermediaries aggressively
Jagendra Kumar adopting standard products, the products are expected to
Ex. CEO, get more visibility and access. The standard insurance
Pearl Insurance Brokers products remain to be the best buy for first-time insurance
Jaipur buyers who do not have any kind of financial protection and

The Insurance Times, October 2021 31