The Hindu Business Line : ‘Insurance penetration has doubled in 6 yrs’

With per-capita income on the rise, insurance is now being seen not only as an instrument for risk coverage, but also for savings purposes, the Finance Minister, Mr P Chidambaram, has said.

Addressing the Parliamentary Consultative Committee attached to the Finance Ministry here on Wednesday, Mr Chidambaram said this trend of seeing insurance as a savings instrument was clearly visible in the economy.

He also said that the insurance penetration, which is a reflection of the gross premium as a percentage of the GDP, had gone up from 2.3 in the year 2000 to 4.8 in 2006.

Similarly, insurance density which measures the gross premium per capita in US dollar had gone up from 9.90 in the year 2000 to 38.40 in the year 2006.

These figures, though, are comparatively less than the figures of some of the countries in the developed world, it is expected that in the years to come there will be further improvement in the insurance penetration and density, he added.

Job creation

Regarding employment generation by the insurance sector, Mr Chidambaram said that in the last seven years the number of insurance agents has gone upto 20 lakh, corporate agents to 5000 and brokers to 258. Further, about 7000 offices have been opened during this period. Stating that, this excludes the indirect employment which is further created by new offices and appointment of brokers and agents, the Finance Minister said that the insurance sector needs to be encouraged. He also said that people are opting for health insurance schemes which have shown an upward trend.

Cover for the poor

He said that the Government had announced a health insurance scheme on October 1 2007 to cover unorganized sector workers belonging to BPL categories and their family members .