)
The Insurance Regulatory and Development Authority (Irda) will soon launch a pilot project involving all the insurance companies to sell small premium insurance products essentially targeting rural and small income household needs. These would be sold through e-Seva in Andhra Pradesh and similar customer service centres elsewhere in the country.
Irda chairman TS Vijayan on Friday said the pilot project would be rolled out in the next three months and was expected to get stabilised in six months. The idea is to sell the products that are simple in nature on technology platforms like e-Seva as small premium products are not usually pushed by the agent-led selling system.
“We have 100,000 costumer service centres in the country. These centres will be used for selling the policies that offer insurance cover for houses, cattle, tractors, fire accidents, even health, for the small income people in rural and urban areas,” Vijayan said.
This would be the next major initiative after the regulator made it mandatory for insurance companies to sell a certain percentage of policies in rural areas in the past. According to him, rural areas account for 23-24 per cent of all the policies sold in the country.
Vijayan said health insurance was growing much more rapidly and the next in line could be the policies that cover assets, houses, fire, burglaries and such products.
Insurance penetration would go up to 6 per cent from the present 3.83 per cent in the next couple of years. “The US-way of calculating the insurance penetration (percentage of total insurance premium to the GDP) may not be that much relevant to Indian context because not every one like a retired person or a housewife requires a policy cover,” he added.
In the non-life sector, the insurance penetration was not showing any growth even though premium collection by the sector grew 2-3 times in recent years. The Indian insurance sector controls Rs 20 lakh crore fund, which is much more than what the mutual funds manage today, he said
On the frequent change in third party administrators (TPAs) by public sector non-life insurance companies, he said they were going to form their own TPA in a year’s time.
