The State Bank of India stated in its Ecowrap report that one in every three life insurance policies in India are sold to women. It also said that recovery in the insurance sector would be fast for both life and non-life insurance going forward.
The SBI Ecowrap stated: “It is heartening to note that every 1 in 3 life insurance policies in India are sold to a woman. The number of policies issued to women in FY21 is around 93 lakh policies which is a 33 per cent share as against a share of 32.23 per cent in 2019-20. The proportion of policies on women in case of private life insurers is 27 per cent and that of LIC is 35 per cent. In 19 States/UTs, the share in number of policies bought by women to the total policies sold is higher than the all-India average of 33 per cent.”
The report highlighted that the penetration of insurance increased from 2.71 per cent in FY01 to 5.20 per cent in FY09 due to liberalisation. However, the penetration saw a gradual fall and reached 3.30 per cent in FY14.
But government support and universal insurance schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana ensured the recovery of insurance penetration from FY15. At FY21 it was at 4.20 per cent.
Even with the COVID-19 pandemic, the insurance sector showed immense resilience with only mild dips in premiums and fast recovery. The pandemic lockdowns impacted the sector where business is primarily based on the performance of the agents.
“During Apr-Feb, FY22, New Business Premium (NBP) of the life insurers increased by 8.4 per cent (YTD) to Rs 2.54 lakh crore,” the report added.
The pandemic also altered the perception of insurance. Firstly, it made people aware about the indispensability of health insurance policies and the need for adequate coverage, better features and seamless services. The realization led more people to buy new policies or port to insurers with better coverage and claim settlement. “During Apr-Jan’22, health insurance portfolio of insurers increased by 25.9 per cent, with a rise in retail health policies of 17.3 per cent and group policies of 30.1 per cent,” SBI Ecowrap added.
Death claims filed by the life insurance industry also increased by 40.8 per cent to Rs 41,958 crore in FY21. Ticket size of death claims increased to Rs 2.44 lakh in FY21, as compared to Rs 2.13 lakh in FY20. The rise in claims appears to be because of COVID-19 deaths.
Despite digitalisation, share of policies sold through online and web aggregators only amount to 1.9 per cent in terms of premium value and around 1.6 per cent in terms of number of policies, the report added.
The Ecowrap stated that Bancassurance – where insurance products or benefits are offered to a bank’s customers – was a growing channel. The share in premium collections has increased to 29 per cent in FY21 from 16.6 per cent in FY14. The share of Bancasurrance in case of private insurers is around 55 per cent.
Non-life insurance business brokers play a significant role and their contribution in total premium increased from 21.9 per cent in FY14 to 31.4 per cent in FY21.
Compulsory enrollment of MGNREGA workers in PMJJBY and PMSBY, rationalizing the 18 per cent GST on insurance policies, and plugging the protection gap in line with Jan Suraksha could further enhance insurance penetration, the report suggested.
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