PSBs lag behind on govt insurance enrolment targets, shows data

Till October of the plan year 2024-25, PSBs have achieved only 40 per cent of their total enrolment target of 6.4 crore for PMSBY

Public-sector banks (PSBs) have fallen short on achieving the annual targets of two flagship insurance schemes for social security, Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), according to the government data reviewed by Business Standard. 

 

Till October 2024-25, while PSBs have achieved only 40 per cent of their enrolment target of 64 million for the PMSBY, they have met just 30 per cent of the 41 million target of the PMJJBY.

 

The PMSBY, launched in 2015, is a one-year accidental insurance scheme, renewable each year, offering coverage for death or disability for persons aged 18-70 years with an individual bank or post-office account.

 

 

The scheme provides accidental death and disability cover of Rs 2 lakh (Rs 1 lakh in the case of partial disability) against a premium of Rs 20 per annum.

 

The premium is auto-debited every year from the subscriber’s bank account, based on a one-time mandate from the account holder.

 

Among the PSBs, Bank of India has the lowest achievement with only 11 per cent of the target, followed by UCO Bank (14 per cent), Bank of Maharashtra (24 per cent), and Union Bank of India (24 per cent).

 

State Bank of India (SBI) and Indian Bank have the highest enrolment percentages, 60 per cent and 45 per cent, respectively. 

 

The PMJJBY is a life-insurance scheme, also launched in 2015, offering coverage for death due to any reason for persons aged 18-50 years with an individual bank or post-office account. People who join the scheme before turning 50 can continue to have life coverage till they are 55 upon paying a premium of Rs 436 per annum for life cover of Rs 2 lakh.

 

UCO Bank has achieved the lowest enrolment at 10 per cent, followed by Bank of India (13 per cent), Union Bank of India (16 per cent), and Punjab National Bank (19 per cent).

 

SBI and Indian Bank have achieved the highest enrolment at 45 per cent and 39 per cent, respectively.

 

“The penetration of insurance schemes depends on casualties, and most of the beneficiaries are Jan Dhan account holders. So, we are slowly trying to gain traction. Additionally, there is a huge emerging insurance market from private companies. But PSBs are trying to scale it up through increased awareness among the people,” said a senior public-sector banker.

 

According to the Insurance Regulatory and Development Authority of India’s Annual Report for 2022-23, the penetration of life insurance decreased from 3.2 per cent in 2021-22 to 3 per cent in 2022-23, while the penetration of non-life insurance remained at 1 per cent in both years.

 

The country’s insurance penetration decreased to 4 per cent in 2022-23 from 4.2 per cent in 2021-22. Globally, insurance penetration and density were 2.8 per cent and $354 for the life segment, and 4 per cent and $499 for the non-life segment. Overall, global insurance penetration and density were 6.8 per cent and $853, respectively, in 2022.

 

Insurance penetration is measured as the percentage of insurance premiums while insurance density is calculated as the ratio of premiums to the population or per capita premium.