The State Bank of India said in its Ecowrap report that one in three life insurance policies in India are sold to women. He also said the recovery in the insurance industry would be rapid for both life and non-life insurance going forward.
SBI Ecowrap said: “It is encouraging to note that 1 in 3 life insurance policies in India are sold to a woman. The number of policies issued to women in FY21 is around 93 lakh representing a share of 33% compared to a share of 32.23% in FY2020. The proportion of policies on women in the case of private life insurers is 27 percent and that of LICs is 35 percent. In 19 states/UTs, the share of the number of policies purchased by women out of total policies sold is above the India-wide average of 33%. »
The report highlighted that insurance penetration increased from 2.71 percent in FY01 to 5.20 percent in FY09 due to liberalization. However, penetration saw a gradual decline and reached 3.30% in FY14.
But government support and universal insurance schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana ensured the recovery of insurance penetration from FY2015. In FY21 , it was 4.20%.
Even with the COVID-19 pandemic, the insurance industry has shown immense resilience with only slight premium declines and a rapid recovery. Pandemic shutdowns have impacted the industry where business relies primarily on agent performance.
“In April-February, FY22, New Business Premium (NBP) of life insurers increased by 8.4% (YTD) to Rs 2.54 lakh crore,” the report added.
The pandemic has also changed the perception of insurance. First, it made people aware of the indispensability of health insurance policies and the need for adequate coverage, better features and seamless services. This awareness has led to more people taking out new policies or transferring to insurers with better coverage and claims settlement. “Between April and January 22, insurers’ health insurance portfolio grew by 25.9%, with retail health policies increasing by 17.3% and group policies by 30.1%,” added SBI Ecowrap.
Death claims filed by the life insurance industry also increased by 40.8% to Rs 41,958 crore in FY21. The ticket amount of death claims rose to Rs 2.44 lakh in FY21 compared to Rs 2.13 lakh in FY20. The increase in claims appears to be due to deaths from COVID-19.
Despite digitization, the share of policies sold through online and web aggregators is only 1.9% in terms of premium value and around 1.6% in terms of number of policies, adds the report.
Ecowrap said bancassurance – where insurance products or benefits are offered to a bank’s customers – was a growing channel. The share of premium collections increased from 16.6% in FY14 to 29% in FY21. The share of Bancasurrance in the case of private insurers is around 55 per cent.
Non-life insurance brokers play an important role and their contribution to total premiums increased from 21.9% in FY14 to 31.4% in FY21.
Compulsory registration of MGNREGA workers in PMJJBY and PMSBY, rationalization of 18% GST on insurance policies and reduction of protection gap in line with Jan Suraksha could further improve insurance penetration , suggests the report.
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