Finance Minister P. Chidambaram has urged the non-life insurance sector to take immediate steps to extend their reach in the country.
The insurance penetration, that is, insurance premium as a percentage of GDP, is at an abysmal 0.71 and this needs to be improved, Chidambaram said.
He was speaking at an event to launch the mediclaim facility for farmers holding Kisan Credit Cards (KCCs) of Dena Bank. The mediclaim facility is being provided through United India Insurance Company.
Chidambaram also said there is a need to increase insurance density in the country. The general insurance density in India is about $9, while in China it is at a little over $50.
Insurance density is calculated as the ratio of premium to population (per capita)
Insurance penetration and density are two measures used worldwide to assess the development of insurance sector in a country.
Chidambaram later handed over mediclaim policies and ID cards to six farmers of different States holding KCCs of Dena Bank.
Celebrating its Platinum jubilee year, Dena Bank sees this initiative — providing mediclaim to 2,25,000 KCC holders (covering their family with maximum cover of Rs 30,000) — as a corporate social responsibility activity.
Currently, there are 27 general insurance companies in the country. The sector has made rapid strides since it was opened to private sector participation in 2002.