Gap between market potential & insurance penetration is huge
The Indian insurance sector needs to ensure prudent pricing by concentrating on bottom-line rather than the top line, according to Namo Narain Meena, Minister of State for Finance.The minister urged the insurance industry to stick to the basics and promote good governance in its second decade of liberalization.
Mr Meena was speaking at an insurance conference organised by General Insurance Corporation of India and Asia Insurance Review on Tuesday in Mumbai. The two-day rendezvous with the theme of "Back to Basics” has over 470 delegates from 36 countries in attendance and is jointly organised by Asia Insurance Review and GIC Re.
Mr Meena said that prudent pricing should also need to be ensured by tightening the underwriting practices in the industry. “Trust is of utmost importance… There is also a need to have a balance between growth and profitability and our strategy in coming years should be guided accordingly,” the minister added.
There is a huge gap between the market potential and insurance penetration in India. Mr Meena citing example of a study said that a 1% increase in insurance penetration leads to 13% reduction in uninsured losses and 22% reduction in taxpayers’ contribution to recovery following a natural catastrophe.
Mr Meena also appreciated the efforts of IRDA (Insurance Regulatory and Development Authority) in helping the industry in challenging times.
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