India needs more number of insurance players, much wider range of products and also more distribution partners to achieve the insurance for all goal by 2047, IRDAI chairman Debasish Panda said here on Tuesday. The insurance sector was opened up more than two decades ago and the market has grown much bigger, but still there is too much scope for faster and deeper growth, he said addressing the annual summit of the Indian Private Equity and Venture Capital Association.
In the past five years, the sector has grown 10 per cent each year, still insurance penetration is too low at 4.2 per cent in 2021 and we need to cover much more, he said. "We're a diverse nation of 1.4 billion people. We can't have a one-size-fits-all approach, instead we need more unique products that can meet the insurance needs of both the super rich as well as the very poor. And such unique products cannot be served by the limited number of players we have today at 70.
"Therefore, we need more players, a much wider range of products and also more distribution partners to achieve the insurance for all goal by 2047," Panda said. Before the nationalization of the sector in the mid-1950, the country with much lower population (over 350 million), had as many as 245 life insurance and 145 non-life firms, 15 of them foreign-owned. There were also 75 provident funds at the time of nationalization.
The life insurance sector was nationalised on January 19, 1956 through the Life Insurance Corporation Act. All the 245 insurance companies operating then were merged into one entity, the Life Insurance Corporation of India."We need more players who can offer unique and more differentiated products and to achieve that we also need more and more differentiated players with deep pockets and also to drive awareness as insurance is still mostly sold with a lot of push, we should make it a pull-product," he said.
To achieve greater penetration, there is a need for more distribution partners too who can hawk more differentiated products that suit the needs of the Gen next as well senior citizens who are more discerning and demanding now. “All we need is to look at insurance with a fresh pair of eyes. And the time has come to re-imagine insurance. We must come together and make it happen before the 2047 target, which is an outer limit, and I want this to be achieved much earlier,” Panda said.
He further noted that millions of small businesses are not properly covered yet."Why can't we have products that suit them? Why can't we have differentiated strategies and products for other sectors like cyber & climate risks, logistics, shared mobility and a long list of other uncovered sectors. We can also have long-term motor policies," he said.