 "DFS secretary expects general insurers to post record profit like PSBs")
Following the record profits achieved by public-sector banks (PSBs) in the financial year 2022-23, the finance ministry now expects state-run general insurance companies to also post record profits in upcoming years.
During the foundation day celebrations of the state-run insurer New India Assurance Co Ltd, Vivek Joshi, secretary of the Department of Financial Services under the Ministry of Finance, shared his outlook. "General insurance penetration in the country is only at 1 per cent, indicating substantial growth potential for the general insurance industry. As we become the third largest economy in the world in the next five to six years, the demand for insurance will continue to grow," he noted.
Joshi expressed confidence that, similar to public sector banks that made a record profit in the last financial year, public sector general insurance companies, including New India Assurance, will see record profits in the future. Public sector banks reported a net profit of over Rs 1 trillion in FY23.
He further outlined the government's goal of increasing the penetration and density of insurance in India, leading to the industry's growth. "The insurance sector in this country has sufficient potential for multi-fold growth. The government is very supportive of the amendments and changes being proposed by the regulator," Joshi commented.
Drawing a comparison to the Jan Dhan Yojna scheme, where 500 million bank accounts have been opened over the past nine years, Joshi predicted significant transformations in the insurance sector, urging companies to prepare for potential challenges that these changes may introduce.
Debasish Panda, the chairman of the Insurance Regulatory Development Authority of India (IRDAI), highlighted at the event the importance of affordable insurance products and services for all societal segments. He revealed that the framework for Bima Vahak, Bima Vistar, and Bima Sugam would soon be implemented, and these will be a game-changer in the insurance sector.
Bima Vahak is a plan to expand insurance coverage in remote areas. Bima Vistar represents comprehensive bundled policies covering life, health, property, and accident insurance. Bima Sugam is proposed as a one-stop solution for all insurance-related services.