Page 10 - Life Insurance Today January 2018

level. The empanelment will be for two years extendable insurance penetration, which is percentage of insurance
by another one year. The regulator looks to spend funds premium with reference to the gross domestic product
on advertising programmes for promoting insurance (GDP), it is still far below the global average. PMSBY offers
awareness among the public, issuing notices, quarterly a renewable one year accidental death-cum-disability
journal and calendar, among other activities. cover of Rs 2 lakh for partial/permanent disability to all
savings bank account holders in the age group of 18-70
During the first decade of insurance liberalisation, the years for a premium of Rs 12 per annum per subscriber.
sector has reported a consistent increase in market
penetration to 5.20 per cent in 2009, from 2.71 per cent While PMJJBY offers a renewable one year life cover of Rs
in 2001. Since then, this has been in decline. However, 2 lakh to all savings bank account holders in the age group
there was a slight increase in 2015, when it reached 3.44 of 18-50 years, covering death due to any reason, for a
per cent compared to 3.3 per cent in 2014. While premium of Rs 330 per annum per subscriber. Besides,
insurance penetration is measured as the percentage of Pradhan Mantri Fasal Bima Yojana (PMFBY) launched last
insurance premium to GDP, insurance density is calculated year to provide financial support to farmers suffering crop
as the ratio of premium to population (per capita loss or damage arising out of unforeseen events will also
premium). add to insurance penetration.

PMFBY is a significant
improvement over the earlier
schemes on several counts
and comprehensive risk
coverage from pre-sowing to
post-harvest losses are some
of the salient points. A budget
provision of Rs 5501.15 crore
has been made for the
scheme. The number of lives
covered under the health
insurance policies during
2015-16 was 36 crore, which is
approximately 30% of India's total population. The number
Insuring the Uninsured:
has seen an increase every subsequent year as 28.80 crore
Growth in the insurance industry can be attributed to the people had the policy in the previous fiscal year.
government's policy of insuring the uninsured by launching
various schemes in the past few years. The Associated Crop insurance has become the third-biggest stream of
Chamber of Commerce and Industry of India (ASSOCHAM), revenue for insurance companies after motor and
has revealed that insurance penetration in India is likely property. In the past, the challenge was assessing the final
to cross 4% by the end of this financial year. The insurance yield, but now technology would help with such
penetration has started its northward journey and it is assessments. However, fragmented landholding and
evident from the fact that it has increased from 3.3% in yield being assessed on area basis exist the challenges.
2014 to 3.44% in 2015 on the back of various insurance To conclude, the sector would be volatile in terms of
schemes launched by the government. profitability. While overall growth has been
good, corporate premiums, however, have not seen a
As part of social security initiative and provide insurance big jump. The motor insurance and health insurance
cover to all, the government had launched Pradhan Mantri segments saw 17 per cent and 22 per cent growth,
Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan respectively. The geographical distribution of life and
Jyoti Bima Yojana (PMJJBY) in 2015. Crop insurance for the non-life insurance offices, tier wise for 2015-16 are as
farmers was launched last year. Despite the gentle rise in follow:

10 January 2018 Life Insurance Today

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