Despite making improvements in the last two decades, the performance of the insurance sector is still way below than in other Asian economies. This was revealed by the recently-released Economic Survey. Two key indicators – Insurance Penetration and Insurance Density – used to assess the performance and potential of the insurance peg India’s growth much below Malaysia, Thailand, and China.
According to the survey, insurance penetration in India increased to 3.76 per cent in 2019 from the 2.71 per cent in 2001. However, it was much lower than Malaysia, Thailand, and China’s, which clocked 4.72, 4.99 and 4.30 per cent, respectively in 2019.
Insurance density too has risen in the country, from $11.5 in 2001 to approximately $78 in 2019. However, here, too, it pales in comparison to Malaysia, Thailand, and China’s 2019 figures of $536, $389, and $430, respectively. Insurance penetration is calculated as the percentage of insurance premium to GDP, while insurance density is the ratio of insurance premium to population.
As of 2019, the penetration of life insurance in India was at 2.82, while non-life insurance’s was further lower at 0.94 per cent in comparison to the global life insurance penetration of 3.35 per cent and non-life segment’s 3.88 per cent in 2019.
The survey said that the government-funded Pradhan Mantri Jan Arogya Yojana (PM-JAY) has improved health insurance coverage, noting that the proportion of households with health insurance increased by 54 per cent for the states that implemented PM-JAY while falling by 10 per cent where it was not. PM-JAY provides Rs 5 lakh medical insurance coverage per year to over 10.7 crore families identified as per the Socio-Economic Caste Census 2011, said the survey.
PM-JAY implementation key to increased coverage
Proportion of households that had health insurance rose by 89 per cent in Bihar, Assam and Sikkim between 2015 and 2019. The figure slumped by 12 per cent in West Bengal in the same period
