Insurance Regulatory and Development Authority of India (IRDAI) chairman T S Vijayan said that improving insurance penetration is the unfinished business from his tenure. He is set to retire in February 2018.
Vijayan, who spoke to the media at the sidelines of the Annual Global Conference of Actuaries in Mumbai, said that while penetration has risen during his term, there is still much room for improvement.
“We have seen insurance penetration go up … but it is still very low, especially in the general insurance sector and still has a lot of area to cover,” Vijayan was quoted as saying by Moneycontrol.
Insurance penetration, which is defined as the percentage of premiums to gross domestic product (GDP), rose to 3.49% in fiscal year 2017 from 3.40% in the previous FY, according to data from
Swiss Re. Life insurance penetration was at 2.72% while general insurance penetration was lower at 0.77%.
India’s insurance density, or insurance premium paid per capita, was US$59.70 in India. This is much lower than the Asian and global averages, which were at US$343.10 and US$638.30 respectively.
Vijayan pointed out upcoming challenges for the Indian insurance sector, which included the adoption of the new International Financial Reporting Standard (IFRS). He also advised the industry to prepare for the sweeping changes that technology would bring in the near future.
During Vijayan’s tenure as head of IRDAI, several insurance-related laws were amended, the most notable of which were allowing additional foreign direct investment as well as opening up the reinsurance sector to foreign players.
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