Outlook Money Insurance Summit 2nd Edition

OutlookIndia

@OutlookMoney Insurance Summit 2nd edition | Watch insightful keynote address on #Rising #Insurance penetration and the way forward from Saurabh Mishra, Union Joint Secretary, Department of Financial Services, Ministry of Finance, GOI.  #Insurance #BFSI #Finance #GeneralInsurance #insurancesummit #OutlookMoney #Money #OutlookMagazine #OutlookGroup  Follow this story and more: https://www.outlookindia.com/

Transcript

00:00 (upbeat music)

00:02 - Good morning all.

00:06 I heartily thank Outlook money for organizing this summit.

00:10 While we take into cognizance all the facts

00:12 which insurance industries are beginning to show

00:14 and most importantly, the key factor of penetration

00:19 which has shown a growth.

00:21 I also want to focus on the message

00:23 that this is a complex journey.

00:25 And we including my colleagues out here

00:27 as well as the audiences.

00:30 Which are all relevant stakeholders

00:31 connected to the industry need to keep working

00:33 in the same direction with the same commitment

00:36 to strive to achieve saturation stage

00:39 of all eligible population when it comes to insurance.

00:42 Now, if I talk about the report

00:45 which IDA has submitted very recently,

00:48 we have moved 12% in absolute terms

00:51 from the year financial year 2019-20 to 2020-21.

00:58 And that jump therefore characterizes itself

01:01 by the percentage that is 3.76% to 4.20%.

01:06 So that's the kind of penetration job that we've achieved.

01:09 India with that has become

01:11 the 11th global insurance business in terms of its size.

01:15 Which is what has come from the Swiss Re report

01:17 which publishes the global data.

01:20 And as far as the total insurance premium volume

01:23 is concerned, we are at two and a half times more

01:28 in terms of comparing it with the global insurance premium

01:31 which we witnessed into the last year

01:33 which has just got concluded.

01:35 So with these numbers in front of us,

01:37 I think it's time to now look at how the journey progresses

01:41 from here onwards to the next level.

01:43 And while we do so, I think one of the most important thing

01:46 that we need to see is that how we have moved

01:49 till date out here.

01:51 When we talk about the penetration that has got increased.

01:55 It's divided into two parts.

01:57 One is about the way the organic growth has been

02:00 ever since liberalization and the emergence of IIDAI

02:04 and the emergence of private sector started off.

02:06 Maybe we are 68 companies out of them.

02:09 If I take out the reinsurance, we are at around somewhere

02:12 around 56 numbers with regard to life and general insurance

02:15 including health of course put together.

02:18 Now with this vast increase that took place

02:20 in terms of the number of payers entering,

02:23 what we went through as a country is a disruption

02:26 in terms of the processes, systems, technology, innovation

02:31 and variety of ways in which people have reached out

02:34 to the masses and customers.

02:36 So that is one way of looking at the analysis

02:39 of the last two decades.

02:40 However, also pitch it against the fact that

02:43 before 2014-15, when some of the government intervention

02:48 regarding social security insurances started out

02:51 in the form of Jeevan Jyoti Vima Yojana

02:53 or Suraksha Vima Yojana or Ayushman that is a health cover

02:57 across the country.

02:59 So I think if you take some of these numbers out,

03:03 it still brings you back into a zone of worry

03:06 in terms of the speed with which we should look

03:08 at penetration of coverage vis-a-vis what we are up to.

03:11 Just to give you some numbers, we are over 50 crores

03:13 into Ayushman scheme, which is the health insurance

03:16 or health penetration side of it.

03:19 Jeevan Jyoti Vima Yojana, which is towards life insurance

03:22 is already amassed around over seven crore members

03:25 or enrollments.

03:26 And Suraksha Vima, which is for accident coverage

03:29 is somewhere around over 20 crore mark or so on and so forth.

03:33 So I think with all these numbers stacking up,

03:37 which covers the Indian population,

03:40 which is eligible in nature,

03:42 and then you pitch it against the percentage,

03:44 which is what is shown here.

03:46 I think we still have quite a distance to travel

03:49 when it comes to the penetration.

03:51 It also has to travel a distance

03:53 in terms of adequacy of insurance,

03:55 which is known as density in the insurance jargons.

03:58 So I think we have got quite a journey to cover.

04:01 It's a good idea to while have a launch

04:03 or an appreciation towards something,

04:05 to also see where we are in terms of the journey

04:08 and where we need to really travel

04:09 from that point onwards.

04:12 Another important variable, friends as we know,

04:15 has been COVID with regard to insurance,

04:18 wherein people have begun understanding the importance

04:22 of how to remain covered and how much to remain covered.

04:27 Even the fact that COVID really took away the breath

04:30 out of all of us as a mood of the country,

04:33 so many (indistinct)

04:35 So I think there's a series of things

04:38 which have happened in the last two years,

04:40 which has made an average Indian citizen conscious

04:43 and take a note in terms of why

04:45 and how it needs to be covered and so on.

04:48 If we do a sectoral analysis,

04:50 I think from life insurance industry point of view,

04:52 new business itself has accounted for 45% of premium,

04:55 which was a massive 2020.

04:57 A clear indicator that more and more people

05:00 are getting woken up to the need of insurance

05:04 and taking it more like a requirement

05:07 rather than a push from the government.

05:10 However, now once again, pitching it,

05:12 on the other side of it,

05:15 health insurance is still a density

05:17 which is just decimal 36% of our GDP

05:21 in terms of its coverage or penetration

05:23 visibly the global average, which is around 2%.

05:26 So we are still maybe five times behind

05:29 the global average when it comes to insurance penetration.

05:33 But if you see the total portfolio,

05:35 we are at around one third of the total

05:38 gross domestic premium,

05:39 which the non-life industry has generated,

05:41 one third of them is insurance.

05:44 So I clearly feel this is the journey

05:47 which is now beautifully poised

05:49 in terms of taking the whole mental power,

05:52 taking the bull by its horn

05:54 and take this to a level where we can go ahead

05:58 with a pragmatic, thoughtful approach.

06:01 We can also think about products

06:04 which can be more specific to the need

06:06 of our hinterland India or the rural India,

06:08 which can be need for a lifestyle product

06:11 or some of those people who are well off.

06:13 And it can be a product which is essential

06:16 to be given to each family

06:18 in terms of its adequate coverage,

06:19 not just of the breadwinner, but also family.

06:22 So I think these alternatives

06:24 need to emerge sooner than later.

06:26 Technology needs to play a huge role

06:28 as we know is the case for penetration

06:31 of any product or services in India.

06:34 This is the only way to my mind

06:36 where we can achieve scale and that's to its speed.

06:39 And lastly, I still feel that if we are able

06:43 to create a resilient infrastructure

06:46 around the health, life, general and other products,

06:49 as well as for the industrial side of the businesses

06:51 in which we have to cover lots and lots of those pandemic

06:54 or the catastrophic and other type of risk.

06:57 My sense is that if you are on a journey

07:00 with everybody participating

07:01 and more so my private sector colleagues,

07:04 as I said that they have yet to deliver

07:07 in terms of the expectation

07:08 that the country holds onto them

07:10 while they do their business profitably,

07:12 innovatively, keep in mind the idea of covering India

07:16 as much as possible, as fast as possible.

07:18 I think we have no looking back

07:20 vis-a-vis the way the world has seen insurance.

07:23 India should be second to none.

07:25 And my thought here,

07:28 and I say that I look forward

07:29 to such discussions taking place

07:32 more and more prominently in the future

07:33 to drive this thought processes

07:35 and to mine some concrete solutions

07:37 which emerge out of such discussions

07:39 for the benefit of the entire sector

07:41 and the entire population of the country.

07:43 Best wishes to the summit and thank you all.

07:45 (upbeat music)

07:48 you

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