Insurance Sector Needs To Grow at 3-4 Times Of Country’s GDP: IRDAI’s Member (Life) BC Patnaik

Insurance Sector Needs To Grow at 3-4 Times Of Country’s GDP: IRDAI’s Member (Life) BC Patnaik

India has the potential of getting Rs 15 lakh crore premium from the existing model, for which the growth required from current levels is around 200 per cent," Patnaik says

 “India’s insurance sector will have to grow at 3-4 times the country’s GDP growth with the help of technology-led innovative products and cost-effective distribution models across the country."

"Many companies are now flooding rural areas as they see value in these markets. They say they will have a cost-effective distribution model and saturate the market. Within 5-10 years all these markets will be saturated as companies have become aggressive,” he said.

He further added that India has the potential of getting Rs 15 lakh crore premium from the existing model, for which the growth required from current levels is around 200 per cent. 

“If in a single year we do 200 per cent growth and maintain it then perhaps we can bridge the gap. If not 200 per cent, if 40-50 per cent then over a period of 10 years the gap will be bridged,” said BC Patnaik. 

Meanwhile, he also added that health insurance per capita spend in India is $5 while in China it is $66 so that is the level of consciousness for health insurance apart from affordability. 

“Out of pocket health expenditure is the major reason for pushing people into poverty. World health insurance penetration as a percentage of GDP is 2 per cent but India is only 0.4 per cent,” added BC Patnaik. 

Further, in order to accomplish the vision of insurance for all, BC Patnark said, “We are thinking of adding more metrics based on percentage of population, societies, occupations, villages, muhallas, number of senior citizens covered, number of business owners covered, number of homes covered. We are working at a very fast pace.”

Sharing perspective on the insurance industry, Tablesh Pandey, Managing Director, Life Insurance Corporation of India, said, :

“The Indian economy is showing resilience in face of global uncertainties. However, in terms of the Indian insurance industry, the importance of insurance has been gaining traction. 

The Indian insurance industry is hailing IRDAI’s commitment to enable insurance for all by 2047, this is expected to aid the entire insurance ecosystem to grow rapidly by bolstering the ease of doing business. 

It will ultimately improve the penetration of insurance with inclusion of women and innovative products for rural folk.”

Tablesh Pandey - Managing Director, Life Insurance Corporation of India, stated that the Indian economy is poised to become the world's third-largest economy by 2030 and this is positive news for insurers because higher economic growth is the main driver of any insurance industry development.