Only 3 Out Of 100 People In India Have Life Insurance Policy: Economic Survey

Economic Survey 2022: Only 1 out of 100 people had a non-life insurance policy in India, according to the official figures. However, the figure has grown steadily in the last decade. In 2011, the non-life insurance penetration stood at 0.70.

New Delhi: According to the latest Economic Survey released by the Ministry of Finance, only 3 people out of 100 have a life insurance policy in India. This figure stood at 2.82 in 2019. The cumulative insurance coverage, including the non-life insurance coverage, stood at 4.2.

The figures for non-life insurance coverage were worse. Only 1 out of 100 people had a non-life insurance policy in India, according to the official figures. However, the figure has grown steadily in the last decade. In 2011, the non-life insurance penetration stood at 0.70.

The life insurance penetration, too, has grown steadily since 2014. In 2014, the life insurance penetration in the country stood at 2.6. It was much higher at 3.4 in 2011. The figure for 2021 still lags behind the 2011 penetration.

The Economic Survey read, “In India, insurance penetration was 2.71 per cent in 2001 and has steadily increased to 4.2 per cent in 2020. As of 2020, the penetration for life insurance in India is 3.2 per cent and nonlife insurance penetration is 1 per cent (Table 15 and 16). While India is at par with international average in terms of insurance penetration for life insurance, we lag behind in terms of non-life insurance. Globally, insurance penetration was 3.3 per cent for the life segment and 4.1 per cent for the non-life segment in 2020.”

Interestingly, Finance Minister Sitharman, in Budget 2021, had said that the government will privatise one public sector insurance company in the upcoming year. However, this plan was not implemented.

The government, on the other hand, has been planning the LIC IPO and according to media sources, the IPO will hit the Indian share markets by March 31, 2022. This is expected to give a major boost to the government finances and will take it one step nearer to the goal of achieving its disinvestment target of Rs 1.75 lakh crore.