The government came out with its latest economic survey on January 31, 2023. Economic Survey 2022-23 also gave an outlook of the non-life insurance sector, especially health insurance, across India over the past year.
According to the survey, the demand for health coverage in the aftermath of the Covid -19 pandemic has and is likely to boost the growth in the non-life insurance sector.
“The growth in the non-life insurance sector is likely to be driven by demand for health coverage, with people more aware of health security post-Covid-19 and strong support from the government-sponsored mass health program (Ayushman Bharat),” the survey said.
Here are the other details from the survey:
In 2021, total global insurance premiums grew by 3.4 per cent in real terms, with the non-life insurance sector registering 2.6 per cent growth, driven by rate hardening in commercial lines in developed markets. During FY22, the gross direct premium of non-life insurers (within and outside India) registered a year-on-year growth of 10.8 per cent, primarily driven by health and motor segments.
The net incurred claims of non-life insurers stood at Rs 1.4 lakh crore in FY22. This was primarily a result of rising per capita income , product innovations and customisation, development of strong distribution channels, and rising financial literacy.
There was steady increase in non-life insurance penetration in India, the survey said, adding that one reason for this could be attributed to the efforts by the insurance regulator to facilitate the penetration of insurance to the lower income segments of the population.
In FY21, 53,046 new micro-insurance policies were issued in the general insurance segment (excluding standalone health insurers), the survey said.
Earlier, the Insurance Regulatory and Development Authority of India (Irdai) had issued Irdai (Micro Insurance) Regulations, 2015, which provides a platform for distributing insurance products that are affordable for the rural and urban poor and promote financial inclusion. Further, the Irdai (Obligations of Insurers to Rural and Social Sectors) Regulations, 2015 stipulate obligations for insurers in rural and social sectors and has contributed to developing and promoting micro-insurance products in India.
Among the various initiatives towards boosting insurance penetration, Irdai has also permitted insurers to conduct video-based know-your-customer (KYC) documentation, launch standardised insurance products, and allow insurers to offer rewards for low-risk behaviour, the survey said.
According to the survey, important government initiatives, strong demographic factors, a conducive regulatory environment, product innovations, and vibrant distribution channels are now supporting the insurance market’s growth.
Notable among the non-life health insurance products launched by the government are the Ayushman Bharat (Pradhan Mantri Jan Arogya Yojana) (AB PMJAY), which aims at providing a health cover of Rs 5 lakh per beneficiary family per annum to secondary and tertiary care hospitalisation. It is primarily designed for poor and vulnerable families identified based on select deprivation and occupational criteria, the survey said.
“Since inception, 197 million beneficiaries have been provided Ayushman cards, and over 43 million hospital admissions worth over Rs 0.49 lakh crore have been authorised through a network of 28,667 empanelled healthcare providers, including 13,115 private hospitals as of January 20, 2023,” the survey said.
Another equally innovative and inclusive non-life health insurance product is the Pradhan Mantri Suraksha Bima Yojana, which provides risk coverage of Rs. 2 lakh for accidental death and complete disability and Rs. 1 lakh for partial disability is given to beneficiaries.
Since its inception, 313 million beneficiaries have been enrolled under the scheme, and 107,000 claims have been disbursed as on November 30, 2022, it added.
The report also quoted the Swiss Re Institute World Insurance: ‘Inflation risks front and centre report’13, report and said that India is one of the fastest-growing insurance markets in the world.
“In total premium volumes, it was the 10th largest globally in 2021, with an estimated market share of 1.9 per cent and the second largest of all emerging markets. India is expected to emerge as one of the top six insurance markets in the world by 2032, ahead of Germany, Canada, Italy, and South Korea,” the survey said.
“Compulsory motor third party insurance will multiply as India’s middle class expands and buys more cars,” it added.
The report further said that with the conflict in Ukraine weighing on economic growth in Europe in particular, it is expected that insurance industry growth in emerging markets will outpace that in the developed markets this year, with emerging Asia in the lead.