Rural Thrust: Indian Insurance Penetration

Private insurers, mostly confining their operations to urban India,  aim at making hefty profits while as public sector insurers, currently struggling for their survival,  both defeating the actual purpose of delivery of insurance services to the public. Lack of trained manpower at rural level with unaggressive marketing strategy

 

Dr. Daleep  Pandita

No financial compensation from insurance sector against the massive damages caused due to recent cyclone storm in costal parts of India,  has exposed the outreach of insurance services in rural India.  

With more than Rs 2 lakh crore annual premium income, Indian general insurance industry, operating through 4 public sector insurers and  30 private insurance companies, have so far,  not been able to penetrate even more than 3 percent of country’s population.

The fact  already within the knowledge of government and the insurance regulator, prefer to do away with penalties imposed on insurance companies rather than to ensure their outreach to vast rural India. 

Tall claims by the authorities on success of their various  welfare insurance schemes launched for the benefit of public, have actually failed to deliver any tangible relief to the downtrodden,  which precisely  got  exposed during the recent wrath of cyclone storm in more that 4 states of the country.

Together with the improvement in insurance services through enhancing cost conscious competition, much needed stress is equally required to be laid on extending  its reach down to rural India also. 

Private insurers, mostly confining their operations to urban India,  aim at making hefty profits while as public sector insurers, currently struggling for their survival,  both defeating the actual purpose of delivery of insurance services to the public. Lack of trained manpower at rural level with unaggressive marketing strategy,

Public sector companies equipped  with about 100 rural insurance products, have not been able to make any substantial dent in rural market. Earlier government insurers had even engaged the services of the specialists exclusively for uplifting rural insurance portfolio but with the passage of time, its very purpose got diluted when due to their efficient competency, their services were utilized for other marketing activities defeating the concept of their basic recruitment.

While as merely insuring motor vehicles moving around rural locations  is being misrepresented by private insurers for achieving their business targets, set for servicing rural sector by the regulator. 

Even insurance regulator in India too has failed to create much needed insurance awareness among the masses and so is the prime objective of  government of the day. Recent cyclone catastrophe,  depriving the poor masses from the real benefit of insurance facility,   serve as an eye opener for the government and the insurance regulator.

Authorities need to reactivate their existing policies, in order to forcefully implement the penetration of insurance service down to actual  India.  By concentrating on about Rs 50,000 crore direct tax and GST revenue generating industry, government can no longer linger on the fulfillment of  social obligations by the insurance sector, that is also affecting our socio economic growth.  

It will be appropriate for the operators to expand insurance services rather than to encourage their spending under Corporate Social Responsibility as mandatory provision put up by the government.

Now the time has come,  that insurance sector in India need to be recognized as an industry, so as to fulfill its social objective and deliver the real benefit of insurance to its public rather than to restrict it as a profit making source.

Even under present scenario, insurance in reality, be it life or non life, is so alien in rural India, that one  still hear the versions like  “  Scooter  ka  LIC  karna  hai  ”.  

Operational network of the operators, specifically active manpower equipped with updated infrastructure deep in to rural and under developed pockets,  need to be strengthened making them time bound accountable to achieve the set objectives, that should be monitored at brief  intervals in order to make it an immediate reality.

Due representation to rural youth need to be given not only to address the problem of developing rural insurance portfolio by making it a successful  massive public participation employment generation programme but also to address their socio economic development need.


    ( Author  is  Retired  Regional  Manager  with  an Indian PSU Insurer )


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