Friday, February 11, 2011

Insurance penetration in rural sector

Industry watchdog comes out with suggestions

Confederation of Indian Industry (CII) has said that rural and social sectors offer huge potential for improving insurance penetration for the uninsured sections of the population. It said that to achieve this, better risk management, innovations on product design and distribution, infusing technology and greater investments was required. It also called for greater engagement of foreign partners in bringing in better risk management practices, innovation in production & distribution, technology and specialized skills.

The industry watchdog was commenting on the Insurance Laws (Amendment) Bill, 2008 which is under consideration by the government.

CII said that insurance penetration to rural and social sectors is marked by high risk and hence more dynamic and efficient risk management systems are crucial while innovation is needed not just in terms of insurance products but also in ways of distributing them. In addition, use of better technologies right from issuance to servicing of Insurance services is also crucial for long term growth of Insurance sector in India.

Insurance industry is witnessing the transformation of insurance agents from mere intermediaries to financial advisors. Greater foreign investments would help in training and skills upgradation of the agents. Well trained agents would be better equipped to convince the customers about the benefits of insurance besides contributing to simplifying the procedure.

India has one of the lowest penetration of health insurance with a majority of people depending on government service which is often inadequate. With the penetration of private health care system in almost all parts of the country, the need is being felt of increasing the cover.

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