India plans to host a state-sponsored global insurance summit to attract investments and address challenges faced by the industry. In this article, we discuss more about this news, the highlights of this summit and the insurance sector in India at present. This topic is relevant for the GS paper III, Indian economy segment of the UPSC Syllabus.
First State-Sponsored Global Insurance Summit
- This will be the first state-sponsored global insurance summit in India.
- It aims to address challenges faced by the insurance industry and attract investments.
- It is expected to be the world’s biggest insurance summit.
- Leaders and top executives from top insurers, reinsurers, broking firms, actuarial organizations, and regulators will participate.
- The summit will coincide with India’s ongoing G-20 presidency. It will be organized closer to the G-20 heads of government meeting in September 2023.
- Efforts are being made to bring in global heads of insurance companies, regulators from developed countries, government representatives, and key policymakers.
- The summit will provide an opportunity to showcase Indian insurers and bring global attention to the industry.
Insurance Sector in India
- The insurance sector in India has undergone rapid transformation in the last couple of years.
- The COVID-19 pandemic has accelerated the pace of digitalization of the sector.
- Insurance penetration in India is low, with an overall penetration of 4.2% in FY21.
- Life insurance penetration is 3.2% and non-life insurance penetration is 1.0%.
- The regulator expects the Indian insurance market to reach $200 billion by 2027.
- Despite the rapid developments, the Indian insurance market is facing certain inherent challenges such as insufficient penetration due to a lack of financial awareness, trust in insurance, a fragmented ecosystem, and high distribution costs.
Steps taken to promote the insurance sector:
- The Indian insurance regulator, IRDAI, has launched an ‘Insurance for all by 2047’ mission, with a focus on increasing insurance penetration in the country.
- The regulator has introduced several measures to boost growth in the sector, including the launch of an online platform called Bima Sugam, which enables insurance products to be bought and sold directly to customers, reducing costs and altering the distribution process.
- The government has increased the limit for foreign direct investment (FDI) in the insurance sector from 49% to 74%, which is expected to attract more foreign investment into the sector.
- The government has also introduced several tax benefits for customers purchasing insurance policies, such as deductions under Section 80C of the Income Tax Act.
- The government has launched several social security schemes, such as the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY) (PMSBY), which provide affordable life and accident insurance to individuals.
- The COVID-19 pandemic has accelerated the pace of digitalization of the sector, making insurance products more accessible to customers.
Read more about insurance sector reforms in India in the linked article.
Conclusion: The state-sponsored global insurance summit in India presents an opportunity for industry leaders to address challenges facing the insurance sector and showcase the potential for growth and innovation in the industry, aligning with the expected futuristic trends in the Indian insurance sector.
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