In a joint research paper on Indian Insurance Industry brought out by Assocham, it was revealed that the penetration level of the general insurance business in India is just 0.60% of its GDP, despite posting an annual growth by 16% under this segment.
The low penetration is in comparison with the global average of 2.14%. The business of general insurance in India is worth Rs 300 billion in terms of annual premium.
The paper further states that one of the biggest constraints facing the general insurance business is the lack of reach beyond the cities. While life insurance players are struggling with the quality of insurance advisors, general insurance players face difficulty in getting intermediaries to distribute their products.
The two drivers for growth are increase in the value of underlying assets with rising GDP and personal incomes, as well as the increasing penetration across categories.
India ranks 136th on penetration levels and lags behind China (106), Thailand (87), Russia (86), Brazil (85), Japan (61) and the US (9). The penetration of general insurance in India remains low on account of low consumer preference, largely untapped rural markets and constrained distribution channels”, adds the paper.