 "Insurance")
The non-life insurance industry is projected to grow by 14-15 per cent in gross direct premium income (GDPI) through to FY37. This forecast was shared with finance ministry officials on Tuesday in a meeting attended by CEOs of private sector general insurance companies, members of the General Insurance Council, and Vivek Joshi, Secretary of the Department of Financial Services, Ministry of Finance.
In March 2023, the non-life insurance sector reported year-on-year growth of 16.41 per cent. However, general insurance penetration in India remains low at 1 per cent as of FY21, compared to 3.4 per cent in Taiwan and 5.2 per cent in South Korea. Industry CEOs attributed this to a lack of awareness and emphasised the role of digital technology in expanding distribution channels.
The meeting also discussed the frequent Goods & Service Tax (GST) notices received by general insurance companies. Faster resolution of disputes and a reduction in GST rates for health insurance policies were identified as necessary for industry growth. The importance of collaboration between state governments and the Ministry of Road Transport and Highways to enforce the Motor Vehicles' Act was highlighted, given that approximately 54 per cent of vehicles in India are uninsured.
The Ministry of Finance's press statement noted the potential for increased cashless facilities and standardisation of treatment costs to drive health insurance growth. According to a Health Insurance Report by Niti Aayog, more than 40 crore people in India lack health protection. The implementation of a hybrid model featuring elements of both trust and insurance is expected to boost the health insurance segment.
The meeting also touched upon the need to promote parametric and crop insurance in the medium term. Agriculture accounts for about 14 per cent of India's economy and 42 per cent of total employment. To address the increasing occurrence of natural catastrophes, insurance agencies are encouraging the adoption of parametric insurance, alongside developing mechanisms to cover the Micro, Small and Medium Enterprise (MSME) sector.
Finally, Deloitte's Insurance Fraud Survey 2023 revealed that 60 per cent of Indian insurers saw an uptick in fraud. The meeting discussed linking insurance frauds to CIBIL scores as a preventive measure.
