Chidambaram asks insurance sector to focus on smaller towns
New Delhi: As India remains among the most under-insured countries in the world, Finance Minister P Chidambaram on Friday asked the general insurance industry to spread awareness about the need for risk cover in smaller towns across the country.
"Awareness about general insurance is dismal (in our country)...India is ranked at 52nd in the world in non-life insurance penetration. We rank lower than Sri Lanka, Malaysia and we are worst among our peers, our famous peers, Brazil, China and Russia," he said here.
Launching a pan India insurance awareness campaign, he said India has to go a long way to increase insurance penetration.
"If you look at non-life insurance, general insurance, we have 27 companies yet the penetration of general insurance in the country is (only) 0.71 percent," Chidambaram said.
The insurance density for general insurance in India is less than USD 9, while it is USD 53 in China. Gross underwritten premium (GWP) of the sector was Rs 69,000 crore in 2012-13.
The Finance Minister stressed that the campaign should not remain limited to metros like Delhi and Mumbai and focus on states such as Bihar, Chhattisgarh, Uttar Pradesh and Uttarakhand, where insurance penetration and awareness low.
"This campaign must go to other capitals, this campaign must go to second tier towns..., he said.
He also asked the Insurance Regulatory and Development Authority (Irda) to focus on development of the insurance sector, saying "while regulations are important, development of insurance industry is equally important".
The Minister said the sooner India wakes up to the imperative of insurance and sheds the tag of one of the most under-insured country in the world, it will be good for the country and the economy.
The awareness campaign with slogan 'Kar Lo Insurance. Kar Lo Rewind' of General Insurance Council is supported by Irda. The two-month multilingual campaign would be rolled out on television, radio and print media.
GIC in a statement said that a pre-campaign research was also carried out across 22 urban and rural locations to gauge the current awareness levels and perception regarding general insurance. The Council also plans to conduct a post campaign to study the impact of the drive.