In the wake of the remarkable financial achievements by public-sector banks (PSBs) in the fiscal year 2022-23, the finance ministry is now eagerly anticipating state-run general insurance companies to replicate this success and attain record profits in the coming years. This article explores the insights shared during the foundation day celebrations of New India Assurance Co Ltd, shedding light on the future prospects of the general insurance industry and the measures taken by the government to propel its growth.
General Insurance Industry’s Growth Potential
Vivek Joshi, the secretary of the Department of Financial Services under the Ministry of Finance, emphasized the significant growth potential for the general insurance industry in the country. He highlighted that the current general insurance penetration stands at a mere 1 per cent, indicating vast opportunities for expansion. With India projected to become the third largest economy in the world within the next five to six years, the demand for insurance is expected to witness substantial growth.
A Positive Outlook
Drawing a parallel to the successful performance of public sector banks in the previous financial year, Vivek Joshi expressed his confidence in state-run general insurance companies, including New India Assurance, to achieve record profits in the future. The public sector banks reported a net profit of over Rs 1 trillion in FY23, and similar impressive results are envisioned for the insurance sector.
Government’s Support and Goals
Vivek Joshi further outlined the government’s commitment to enhancing the penetration and density of insurance in India, which would catalyze the industry’s growth. The government is actively supportive of the regulatory amendments and changes proposed to facilitate the insurance sector’s expansion.
Transformations in the Insurance Sector
Comparing the growth trajectory of the insurance sector to the Jan Dhan Yojna scheme, which witnessed the opening of 500 million bank accounts over the past nine years, Joshi predicts significant transformations in the insurance industry. He urges insurance companies to be prepared for potential challenges that may arise due to these changes.
IRDAI’s Game-Changing Initiatives
Debasish Panda, the chairman of the Insurance Regulatory Development Authority of India (IRDAI), stressed the importance of making insurance products and services affordable and accessible to all segments of society. He revealed the upcoming implementation of three game-changing frameworks.
Bima Vahak is a strategic plan designed to extend insurance coverage to remote and underserved areas, ensuring that a wider population can benefit from insurance protection.
Bima Vistar represents a comprehensive package of bundled policies covering life, health, property, and accident insurance. This holistic approach aims to provide comprehensive coverage to policyholders.
Bima Sugam is envisioned as a one-stop solution for all insurance-related services, streamlining processes for customers and making insurance transactions more convenient.
The record profits achieved by public-sector banks have ignited optimism for state-run general insurance companies. With the government’s strong support and a plethora of transformative initiatives on the horizon, the insurance sector is poised for exponential growth. As India’s economy ascends to greater heights, the demand for insurance is expected to soar, unlocking abundant opportunities for the insurance industry to thrive.