Budget 2017 should look to increase insurance penetration in India, says M Ravichandran, President – Insurance, Tata AIG General Insurance. According to M Ravichandran insurance is treated as a compulsion and not as an essential component and the government can do much in changing this perception. “With the implementation of the Goods and Service Tax (GST) Bill, the Indian economy will witness positive strides. It will help create uniformity in the tax structure pan-India by removing several taxes and seamless tax credits, though with the added cost of compliances. For the insurance sector, we hope to be in the lower tax rate (ie., 5% or 12%) considering the low market penetration and the large middle class component of the Indian population with plenty of available potential,” he says. Ravichandran lauds the government for its efforts in providing health insurance coverage for Below Poverty Line (BPL) families. However, he believes that more can be done for the salaried class. “Currently if one purchases a health insurance policy for self /spouse/children, he/she can claim a tax deduction of upto Rs 25000/. When one purchases a health insurance policy for parents (a senior citizen), he/she is eligible for an additional tax deduction benefit upto Rs 30,000/-. Given the rising cost on medical expenditures, it would be even more beneficial if they could provide further tax benefits under 80 D,” he advises. According to him, in recent years India has witnessed an alarming trend with regard to natural calamities. “The same results in mammoth loss not only to life but property. The government’s role here, and critically, should be to help increase Home insurance penetration to the lengths and corners of India – given that awareness levels are still low,” he says. “Government can look to create awareness campaign on the importance of insuring home and contents and can also like in the case of Motor Insurance, they can look at making Home Insurance compulsory. Another step of encouragement would be to give tax benefits in this area,” he adds. Ravichandran is of the view that with recent cyber-attacks on banks, the industry has witnessed an increased trend in buying cyber insurance. “The government can do its bit by taking necessary steps to curb cybercrimes. It needs to speed up the process of setting up advanced cyber security and e-surveillance agency,” he points out. IRDAI has made e-insurance mandatory and with digitalisation it becomes easier for policyholders to maintain policy documents and availing an insurance policy online. This system will work even better if the government can announce incentives to boost online transactions, he concludes.
