The Insurance Regulatory and Development Authority of India (IRDAI) on Friday said that the protection gap, i.e. the required cover and the cover actually availed, in the Indian life insurance Industry has reached Rs. 480 lakh crore. IRDAI also said that the health insurance market in India has reached Rs 3 lakh crore potential.
T. S. Vijayan, Chairman, IRDAI was reported saying that over Rs 6 lakh crore of insurance premium was collected in India in 2017. The potential is even bigger, he said at the FICCI annual insurance summit in Mumbai.
"The average award by the motor insurance claims tribunal to accident victims family is Rs 5 lakh," said Vijayan. This includes children, women and senior citizens across classes. Motor Accident Claims Tribunal value a life averagely at Rs 5 lakh. Even if you take the population size to be 100 crores, the required total sum insured is Rs 500 lakh crore as against Rs 120 lakh crore," said Vijayan.
According to Vijayan, the protection gap in health insurance has also increased. "If you consider the Rs 3 lakh crore spent by people on healthcare, this should be the size of the health insurance market if all the costs were to be borne by insurance," said Vijayan.
Speaking about the opportunities in the Indian insurance market, Vijayan said that India could become a reinsurance hub with several foreign reinsures setting up branches in India and Gift city throwing open offshore opportunities.
Later speaking to reporters, Vijayan said that the regulator will come out with new reinsurance regulations by February end. These regulations will define the business in India and the order of preference, he added.
On foreign companies showing interest in entering the Indian market, the regulator said there are four or five that have applied for licences and have shown a keen interest in the non-life and health front.
Recommended Read: IRDAI Issues Further Clarification on Motor Insurance Guidelines