@OutlookMoney Insurance Summit 2nd edition | Watch insightful keynote address on #Rising #Insurance penetration and the way forward from Saurabh Mishra, Union Joint Secretary, Department of Financial Services, Ministry of Finance, GOI.
#Insurance #BFSI #Finance #GeneralInsurance #insurancesummit #OutlookMoney #Money #OutlookMagazine #OutlookGroup
Follow this story and more: https://www.outlookindia.com/
#Insurance #BFSI #Finance #GeneralInsurance #insurancesummit #OutlookMoney #Money #OutlookMagazine #OutlookGroup
Follow this story and more: https://www.outlookindia.com/
Category
🗞
NewsTranscript
00:00 (upbeat music)
00:02 - Good morning all.
00:06 I heartily thank Outlook money for organizing this summit.
00:10 While we take into cognizance all the facts
00:12 which insurance industries are beginning to show
00:14 and most importantly, the key factor of penetration
00:19 which has shown a growth.
00:21 I also want to focus on the message
00:23 that this is a complex journey.
00:25 And we including my colleagues out here
00:27 as well as the audiences.
00:30 Which are all relevant stakeholders
00:31 connected to the industry need to keep working
00:33 in the same direction with the same commitment
00:36 to strive to achieve saturation stage
00:39 of all eligible population when it comes to insurance.
00:42 Now, if I talk about the report
00:45 which IDA has submitted very recently,
00:48 we have moved 12% in absolute terms
00:51 from the year financial year 2019-20 to 2020-21.
00:58 And that jump therefore characterizes itself
01:01 by the percentage that is 3.76% to 4.20%.
01:06 So that's the kind of penetration job that we've achieved.
01:09 India with that has become
01:11 the 11th global insurance business in terms of its size.
01:15 Which is what has come from the Swiss Re report
01:17 which publishes the global data.
01:20 And as far as the total insurance premium volume
01:23 is concerned, we are at two and a half times more
01:28 in terms of comparing it with the global insurance premium
01:31 which we witnessed into the last year
01:33 which has just got concluded.
01:35 So with these numbers in front of us,
01:37 I think it's time to now look at how the journey progresses
01:41 from here onwards to the next level.
01:43 And while we do so, I think one of the most important thing
01:46 that we need to see is that how we have moved
01:49 till date out here.
01:51 When we talk about the penetration that has got increased.
01:55 It's divided into two parts.
01:57 One is about the way the organic growth has been
02:00 ever since liberalization and the emergence of IIDAI
02:04 and the emergence of private sector started off.
02:06 Maybe we are 68 companies out of them.
02:09 If I take out the reinsurance, we are at around somewhere
02:12 around 56 numbers with regard to life and general insurance
02:15 including health of course put together.
02:18 Now with this vast increase that took place
02:20 in terms of the number of payers entering,
02:23 what we went through as a country is a disruption
02:26 in terms of the processes, systems, technology, innovation
02:31 and variety of ways in which people have reached out
02:34 to the masses and customers.
02:36 So that is one way of looking at the analysis
02:39 of the last two decades.
02:40 However, also pitch it against the fact that
02:43 before 2014-15, when some of the government intervention
02:48 regarding social security insurances started out
02:51 in the form of Jeevan Jyoti Vima Yojana
02:53 or Suraksha Vima Yojana or Ayushman that is a health cover
02:57 across the country.
02:59 So I think if you take some of these numbers out,
03:03 it still brings you back into a zone of worry
03:06 in terms of the speed with which we should look
03:08 at penetration of coverage vis-a-vis what we are up to.
03:11 Just to give you some numbers, we are over 50 crores
03:13 into Ayushman scheme, which is the health insurance
03:16 or health penetration side of it.
03:19 Jeevan Jyoti Vima Yojana, which is towards life insurance
03:22 is already amassed around over seven crore members
03:25 or enrollments.
03:26 And Suraksha Vima, which is for accident coverage
03:29 is somewhere around over 20 crore mark or so on and so forth.
03:33 So I think with all these numbers stacking up,
03:37 which covers the Indian population,
03:40 which is eligible in nature,
03:42 and then you pitch it against the percentage,
03:44 which is what is shown here.
03:46 I think we still have quite a distance to travel
03:49 when it comes to the penetration.
03:51 It also has to travel a distance
03:53 in terms of adequacy of insurance,
03:55 which is known as density in the insurance jargons.
03:58 So I think we have got quite a journey to cover.
04:01 It's a good idea to while have a launch
04:03 or an appreciation towards something,
04:05 to also see where we are in terms of the journey
04:08 and where we need to really travel
04:09 from that point onwards.
04:12 Another important variable, friends as we know,
04:15 has been COVID with regard to insurance,
04:18 wherein people have begun understanding the importance
04:22 of how to remain covered and how much to remain covered.
04:27 Even the fact that COVID really took away the breath
04:30 out of all of us as a mood of the country,
04:33 so many (indistinct)
04:35 So I think there's a series of things
04:38 which have happened in the last two years,
04:40 which has made an average Indian citizen conscious
04:43 and take a note in terms of why
04:45 and how it needs to be covered and so on.
04:48 If we do a sectoral analysis,
04:50 I think from life insurance industry point of view,
04:52 new business itself has accounted for 45% of premium,
04:55 which was a massive 2020.
04:57 A clear indicator that more and more people
05:00 are getting woken up to the need of insurance
05:04 and taking it more like a requirement
05:07 rather than a push from the government.
05:10 However, now once again, pitching it,
05:12 on the other side of it,
05:15 health insurance is still a density
05:17 which is just decimal 36% of our GDP
05:21 in terms of its coverage or penetration
05:23 visibly the global average, which is around 2%.
05:26 So we are still maybe five times behind
05:29 the global average when it comes to insurance penetration.
05:33 But if you see the total portfolio,
05:35 we are at around one third of the total
05:38 gross domestic premium,
05:39 which the non-life industry has generated,
05:41 one third of them is insurance.
05:44 So I clearly feel this is the journey
05:47 which is now beautifully poised
05:49 in terms of taking the whole mental power,
05:52 taking the bull by its horn
05:54 and take this to a level where we can go ahead
05:58 with a pragmatic, thoughtful approach.
06:01 We can also think about products
06:04 which can be more specific to the need
06:06 of our hinterland India or the rural India,
06:08 which can be need for a lifestyle product
06:11 or some of those people who are well off.
06:13 And it can be a product which is essential
06:16 to be given to each family
06:18 in terms of its adequate coverage,
06:19 not just of the breadwinner, but also family.
06:22 So I think these alternatives
06:24 need to emerge sooner than later.
06:26 Technology needs to play a huge role
06:28 as we know is the case for penetration
06:31 of any product or services in India.
06:34 This is the only way to my mind
06:36 where we can achieve scale and that's to its speed.
06:39 And lastly, I still feel that if we are able
06:43 to create a resilient infrastructure
06:46 around the health, life, general and other products,
06:49 as well as for the industrial side of the businesses
06:51 in which we have to cover lots and lots of those pandemic
06:54 or the catastrophic and other type of risk.
06:57 My sense is that if you are on a journey
07:00 with everybody participating
07:01 and more so my private sector colleagues,
07:04 as I said that they have yet to deliver
07:07 in terms of the expectation
07:08 that the country holds onto them
07:10 while they do their business profitably,
07:12 innovatively, keep in mind the idea of covering India
07:16 as much as possible, as fast as possible.
07:18 I think we have no looking back
07:20 vis-a-vis the way the world has seen insurance.
07:23 India should be second to none.
07:25 And my thought here,
07:28 and I say that I look forward
07:29 to such discussions taking place
07:32 more and more prominently in the future
07:33 to drive this thought processes
07:35 and to mine some concrete solutions
07:37 which emerge out of such discussions
07:39 for the benefit of the entire sector
07:41 and the entire population of the country.
07:43 Best wishes to the summit and thank you all.
07:45 (upbeat music)
07:48 you