The need for greater insurance penetration in both the life and non-life segments has been underscored by the economic survey. The survey points out insurance penetration in the country remains significantly lower than its Asian peers.
However, it has mentioned that though comparatively low, penetration has incre-ased significantly since the opening up of the sector for private players. This increase due to entry of new players, introduction of new products and channels of distribution and increasing penetration of private insurance companies in uncovered markets.
Life insurance penetration increased from 1.77 per cent in fiscal 2000 to 4.10 per cent in FY07 and it declined slightly to four per cent in FY08.
The per the provisional figures provided by Life Insurance Council, the life insurance penetration in FY09 was 4.30 per cent.
General insurance penetration in 2000 was 0.55 per cent of GDP which went up to 0.60 per cent in 2006 and remained same in 2007. Insurance penetration is defined as the ratio of premium underwritten in a given year to GDP.
The survey has also called for greater reforms in the pension sector and has argued that this will not only help in facilitating the flow of long-term savings for investments and funds for infrastructure development, but would also help the government to fund its pension liabilities.
