General insurance in India is a poor second cousin to life insurance. That is because life insurance impacts people directly whereas general insurance, consisting of products like fire, liability, engineering and marine insurance, is usually purchased by companies. It typically gets relegated to an unimportant compliance under the ambiguous moniker of risk management. This explains why the general insurance penetration in India is just 0.7% of the gross domestic product (GDP) compared to the world average of 2.7%.
General insurance deserves more attention because the cost of getting it wrong is high. It impacts the economic well-being of companies severely and, by extension, you as much as life insurance does. I’m using a few recent, well-known catastrophes to illustrate the kinds of issues in general insurance.
