Insurance Agents helps increase insurance penetration in India: Swiss Re

Agents helps increase insurance penetration in India: Swiss Re

The insurance penetration increased to nearly 3.5% in FY 2016-17 while the insurance density stood at US $59.7 during the same period.
Rosevina Gonsalves Jul 12, 2017

Insurance intermediaries, like agents and insurance marketing firms, have been helping the insurance industry to extend its footprint across the country, finds the latest Swiss Re report.

Since last year, the insurance industry has started picking up momentum. Insurance penetration recorded a marginal growth of nearly 3.5% in FY 2016-17 as against 3.4% in FY 2015-16. Insurance density also increased to nearly US $60 as against US $55 in the previous fiscal, finds a recent Swiss Re report.

The measure of insurance penetration and density reflects the level of development of the sector. While insurance penetration is measured as the percentage of insurance premium to GDP, insurance density is calculated as the ratio of premium (in US $) to total population (per capita premium).

In FY 2015-16, the insurance industry saw a marginal increase in insurance penetration and density after five years of continuous decline. This is the second consecutive year when the industry recorded growth in its penetration and density.

While life insurance penetration in India stood at 2.72%, general insurance witnessed penetration 0.77% last fiscal. The report estimated that life insurance business in India would grow at a faster pace compared to non-life business.

The report attributed this growth to efforts of insurance intermediaries such as insurance agents and brokers. Insurance intermediaries accounted for a whopping 60-70% of gross premiums last fiscal, the report stated. Their role in the sale of life insurance remains especially important, probably reflecting the more complex nature of many of the life products and the value policyholders attach to an agent’s advice.

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