The Indian insurance sector needs to ensure prudent pricing by concentrating on bottom-line rather than the top line, said Namo Narain Meena, Minister of State for Finance here today.
Speaking at an insurance conference organised by General Insurance Corporation of India and Asia Insurance Review, the minister said that prudent pricing should also need to be ensured by tightening the underwriting practices in the industry. "To remain healthy and competitive, in this new and dynamic environment, we would need to stick to the basics," he said.
Meena further added that there is a gap between the market potential and actual insurance penetration in India. "A study has pointed out that a 1% increase in insurance penetration leads to 13% reduction in uninsured losses and 22% reduction in taxpayers' contribution to recovery following a natural catastrophe," he mentioned.
Talking about the challenges in the industry, he said that it was a challenge for the Indian insurance industry to remain in good health and maintain absolute transparency and highest standards of corporate governance. "It would be in the interest of both the industry and its customers that business be done in ethical and professional ways," he added.
The MoS Finance also lauded the efforts of the insurance regulator in helping the industry in tough times. He explained that though experts have found the Insurance Regulatory and Development Authority (Irda) apparatus a tough and conservative one, he added that their cautious approach have helped keep the industry on rails in troubled times.