Reforms in the distribution of insurance products, introduction of simpler products and higher level of awareness were identified as the key tools to broaden life and non-life insurance coverage in India at FINSEC-2014, a financial sector conclave organised by the FICCI here today.

A savings tool Industry experts pointed out how insurance coverage, both in the life and general segments, is moving up at a tardy pace. In the life segment, insurance is more of a savings tool than a risk coverage cushion. The role of re-insurance was also discussed in the context of managing the capital strain on primary life and non-life insurers. After the Uttarakhand flood, the need for re-insurance in public infrastructure was felt.

Ritesh Kumar, MD and CEO of HDFC ERGO General Insurance Co, said there is a need to bring out over-the-counter savings-cum-risk products, which should be simpler to subscribe to. He also said there are no incentives to distribution agents as the premium values were low, for which suitable reforms in the distribution of insurance products are needed.

He pointed out that only six per cent of the loss suffered during disasters and national calamities in India gets insured. “The loss in the whole of Asia in the aftermath of such calamities is estimated at $62 billion, and only six per cent of this is insured, the same level as in India,” he said.

Srinivasa Rao, CEO of Munich Re India Services, said the focus should be on term products. He pointed out that the cost of products is not a big issue, as it is one of lowest in the global market.

Arun Agarwal, Lloyd’s General Representative in India, said unless the primary insurance market in India is improved, the re-insurance sector cannot grow.

He, however, said India provides ample opportunities for growth in the re-insurance sector.

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