Bringing insurance to middle India and beyond


The widely anticipated launch of the Jan Dhan Yojana in 2014 brought large swathes of the Indian population into the organized banking fold in a single stroke. Close on its heels, the Pradhan Mantri Jan Suraksha Yojana brought pensions, term insurance and accident insurance to the marginalized.


That these initiatives were badly needed is evident from the 18-percentage-point growth in banking penetration (to 53%1) on the back of the Jan Dhan Yojana, and the 100 million+ enrollments in government-sponsored insurance schemes.


Yet in spite of this boost, overall insurance penetration was a pitiful 3.4%2 in 2015-16, just scraping above the 3.3% in 2014-15 (itself a 10-year low), with the figures for non-life insurance even lower at less than 1%3. This is despite the fact that total insurance premiums rose 7.9% in 2015, with non-life premiums rising 8.1%, led by health (including personal accident) and motor TP liability premiums.

These numbers suggest there is a huge untapped market out there, in metros and Tier-II and Tier-III towns alike, but few insurers have made significant inroads into it. Looking to the future, these are the four steps I believe every insurer must take to turn that round:

  • Piggyback on the new bank accounts and improved KYC infrastructure to manage customer profiles and risks better. This simplifies policy purchases and, in future, will enable insurers to offer products and pricing customised to the individual’s profile.
  • Educate potential customers about the benefits of health and home insurance. Lack of awareness of potential benefits is the key obstacle to better penetration of non-life products. The large enrolment for life insurance suggests that people are receptive to the idea of cover for themselves and their families – these same people could make good candidates for health and home insurance.
  • Simplify products, forms, processes for applications and claim settlement, so as to ease interactions and upgrade the customer experience.
  • Harness technology (especially mobile infrastructure) more efficiently at both the front-end and back-end, to complete processes quicker and cheaper, and to reach out to customers with more relevant offerings to improve engagement. The goal should be to enable customers to reach out to their insurance company seamlessly, from anywhere, at any time.

The industry is at a crossroad. Customers are far better informed and increasingly appreciate the need for life and non-life insurance alike. But as an industry, we’ve been unable to shake off old stereotypes and position ourselves as dependable allies in a crisis.

There is tremendous potential, but only those companies that focus on these measures will realise it. A more efficient outreach programme could give them a clearer understanding of the options available. At SBI General, we already draw on the legacy, reach and the trust of the SBI brand, and it’s upon us to live up to that reputation, and ensure that our customers needn’t go anywhere else to fulfil their insurance requirements.


  3. (0.7% in 2014-15)