Lok Sabha Question No. 2056 (UNSTARRED), answered on 2023-03-13
Subject: Growth of Insurance Sector
Ministry: FINANCE
Asked by: Manjulata Mandal, Ganesan Selvam, Kuldeep Rai Sharma, Subhash Ramrao Bhamre, Amol Ramsing Kolhe, C.N. Annadurai, Supriya Sadanand Sule, DNV Senthilkumar. S., Dhanush M Kumar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 2056

ANSWERED ON - 13.3.2023

## GROWTH OF INSURANCE SECTOR

## 2056. SHRIMATI MANJULATA MANDAL:

SHRI SELVAM G.:

SHRI KULDEEP RAI SHARMA:

DR. SUBHASH RAMRAO BHAMRE:

DR. AMOL RAMSING KOLHE:

SHRI C.N. ANNADURAI:

SHRIMATI SUPRIYA SULE:

DR. DNV SENTHILKUMAR S.:

SHRI DHANUSH M. KUMAR:

Will the Minister of FINANCE be pleased to state:

- (a) whether the growth rate of the insurance sector in the country is very low and if so, the details thereof and the reasons therefor;
- (b) whether the Government's decision to raise the Foreign Direct Investment (FDI) limit in the insurance sector has yielded positive results and if so, the details thereof;
- (c)  whether the various Government insurance schemes such as Sampoorna Bima Gram Yojana, Jeevan Jyoti Bima Yojana etc., has helped in the growth of insurance sector, if so, the details thereof;
- (d) whether the Government has launched Bima Sugam Portal and if so, the details thereof and the purpose behind the move; and
- (e) the other steps taken by the Government to increase investment in the insurance sector?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR. BHAGWAT KARAD)

(a) to (e): As per the annual report of Insurance Regulatory and Development Authority of India (IRDAI), life insurance industry recorded a premium income of ₹6.93 lakh crore during 2021-22 as against ₹6.29 lakh crore in the previous financial year, registering growth of 10.16 per cent and the general insurance industry underwrote total direct premium of `2.21 lakh crore in India in the year 2021-22 registering a growth of 11.06 per cent from previous year.

With  a  view  to  enhance  penetration  and  growth  and  augment  domestic  capital  in  the insurance sector, the Government enhanced foreign investment (FDI) limit to 74% for the Indian insurance companies in 2021.

The amount of FDI in insurance sector since December, 2014 when the limit was raised to 49%, up to 31 st  March, 2021 was Rs. 26,149.38 crore and the amount of FDI increased to Rs. 34,977.49 crore, as on 12th Sept 2022.

As  per  the  annual  report  of  Insurance  Regulatory  and  Development  Authority  of  India (IRDAI) for financial year 2021-22, the insurance penetration in the country stands at 4.2, as compared to global average of 7.0.

The  Government  has  taken  various  initiatives  to  enhance  insurance  penetration  and coverage, especially for the underserved and unserved population of the country, through its flagship social security schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana covering approximately 15.42 crore lives, Pradhan  Mantri Suraksha  Bima  Yojana  covering approximately 32.78 crore lives, and Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana covering  approximately  21.4  crore families, against life, accident and  health risks respectively,  as  on  December,  2022.  Besides,  a  total  of  35.64  lakhs  Rural  Postal  Life Insurance (RPLI) policies have been issued till now from 2017 including policies under Bima Gram Yojana (administered by Department of Posts, Ministry of Communications).

As regards Bima Sugam portal, IRDAI has informed that in order to address the existing protection gap in India across life, health and general insurance businesses and based on consultations  held  with  various  stakeholders  and  subject  matter  experts,  a  need  has emerged for setting up an insurance market infrastructure where the insurers, distribution networks and the policyholders would virtually meet across a seamless digital platform. Bima Sugam would be such platform  which  is  expected  to  improve  accessibility  and  ease  of insurance purchase to policyholders on one hand and serve as a readymade digital platform for insurers and distribution network on the other.

In order to attract fresh capital into the insurance sector, IRDAI has eased the process of setting up an insurance company, viz .  No  Objection Certificate (NOC) portal, creation of Facilitation  Cell  for  guiding  applicants  during  the  course  of  registration  process,  and revamping  Registration  regulations  to  promote  ease  of  doing  business.  The  norms pertaining  to  investments  of  promoters/  investors  in  the  insurance  companies  have  also been eased.

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