CHENNAI; The Economic Survey 2018, released on Monday, said insurance penetration -- the ratio of premium underwritten in a given year to the gross domestic product (GDP) -- in India increased to 3.49% in 2016-17 from 2.71% in 2001.
In comparison, some of the emerging economies in Asia such as Malaysia (4.77%), Thailand (5.42%) and China (4.77%) have a higher insurance penetration than India.
The country's life insurance penetration was 2.72% and general insurance penetration was 0.77%; this compares to a global insurance penetration of 3.47% for life and 2.81%.
"Insurance, being an integral part of the financial sector -- should be assessed on the basis of two parameters, viz., insurance penetration and insurance density, which is the ratio of premium underwritten in a given year to the total population," said the survey. "India's insurance density has increased to $59.7 from $11.5 in 2001 - with life insurance density of $46.5 and general insurance density of $13.2. This compares to global average insurance density of $353 for life and $285.3 for non-life," it said.
The comparative figures for Malaysia ($452.2), Thailand ($323.4) and China ($337.1) were higher than India. Crop, motor, health insurance sectors boosted non-life GDP premium growth by 33% year-over-year to Rs 1.30 lakh crore; highest y-o-y growth rate since 2000-01. Life insurance premium grew 14% to Rs 4.18 lakh crore as against Rs 3.67 lakh crore in the previous financial year.
In the last five years, however, there has been a dip in savings via insurance. "There was a significant decline in the proportion of deployment of financial savings in bank deposits and life insurance funds and an increase in share of currency, provident and pension funds, claims on government (primarily in small savings) in 2015-16. Bank deposits accounted for about 50% of the aggregate financial savings between 2011-12 and 2015-16," said the survey.
